Case Study : Abercrombie And Fitch

Abercrombie & Fitch (A&F), an American retailer that concentrates on upscale casual wear for young consumers, which was founded in Manhattan, New York City in June 4, 1892 by two young minds of David T. Abercrombie and Ezra Fitch. Beginning with a rough journey of selling sporting outfits and excursion goods such as fishing and hunting equipment, A&F had to file bankruptcy in 1977. Soon thereafter, the company was revived after Jake Oshman, owner of Oshman Sporting Goods, bought A&F in 1978. A&F was relaunched as a mail-retailer company specializing in hunting wear and novelty items, but was bought by The Limited ten years after its revival. The gradual shift to focusing on apparels for young consumers began when A&F was a subsidiary of Limited Brands, and since then, A&F has grown to become one of the largest apparel firms in the United States. In 1998, A&F launched Abercrombie Kids, targeting consumers from age 7-14, which further increases its revenue. In 1999 to early 2000s, A&F’s sales skyrocketed as it hit its zenith, by portraying A&F clothing as the “coolest thing” through billboard-winning song that compliments A&F in the lyrics, as well as other advertisements. Furthermore, A&F launched a subsidiary called Hollister to tackle similar age group of target audience but with lower income. This expansion to dominate the market of teenagers through consideration of other demographic factor, namely income, was exceptional for A&F’s revenue. Presently, A&F focused on

I am very pleased to state that Urban Outfitters is doing exceptionally well compared to our competitor Abercrombie and Fitch. I picked this competitor to complete a stock analysis because Abercrombie and Fitch has been a big leading competitor for many years. They sell clothing geared towards men, women, and children. The companies are known as Abercrombie Kids and, Hollister Co. Urban Outfitters owns Anthropologies, Free People, Terrain, and Bhldn. Considering they have been competitors for many years and both own several clothing brands targeted to different groups of people they are worth comparing.

Back when Abercrombie & Fitch first opened the high priced items of outdoor gear was something that people were really willing to purchase; it was in high demand, but as times gone on, people are not purchasing those kinds of items any more and especially not with such high prices. Abercrombie & Fitch will not give it up and change to something that is in higher demand these days. They are mainly focused on their image, which is not always good. As time goes on, trends and interests change, which Abercrombie & Fitch does not understand. Of course, image is important through a company, but it is definitely not the most important part of a business when trying to develop success. Their dedication to their image is a routine operating problem. They are never going to change because it has gone on for so long. If a new CEO comes in, maybe the recurring problem may change, but other than that the problem is continuing and still continues

Each year the company has struggled to capitalize in the market. On March 19, 2017, the company stocks were downgraded from a “strong buy” to a simple “buy rating”. The American Baking and Market News (2017) states “The firm’s quarterly revenue was down 6.9% compared to the same quarter last year. Equities research analysts forecast that Abercrombie & Fitch Co. will post ($0.07) EPS for the current fiscal year”. The target market the Abercrombie & Fitch is looking to attract are not purchasing their products as the company envisioned. Hibash Yousuf states:

They continued to shop at Abercrombie although many others offered the same clothing. Profits continued to soar and A&F saw clear sailing in their future.

Abercrombie & Fitch, the upscale clothing retailer known for its attractive sales assistant’s and models used for stores and advertisements has a long history of racism and sexism. Starting back in 2002, the company sold shirts that were racially insensitive to Asians, marketed thongs with sexual phrases on them to pre-teens, and made men shirts that read “Female students needed for sexual research.” These products were soon removed after they caused controversy among parents and young women. The company then faced charges that its branding and hiring practices are discriminatory. Their stores allow white people to work in the front while Asians, and African Americans work in the back. The company has been sued numerous times for for religious discrimination and discrimination against handicapped customers. Abercrombie & Fitch also doesnt stock womens pants above size 10, limiting their market to only slim and petite women.

Hollister performed well for the organization in the last announced quarter in spite of a testing retail condition, a pattern which is relied upon to proceed in the primary quarter also. In any case, for Abercrombie, the brand has not possessed the capacity to conquer the difficulties postured by the attire showcase, which is required to bring about a slower than anticipated advance of the brand renewal arranges. The organization's lead and traveler stores are foreseen to weigh vigorously on the outcomes, accordingly of the holding on activity headwinds.

Hollister performed well for the company in the last reported quarter despite a challenging retail environment, a trend which is expected to continue in the first quarter as well. However, for Abercrombie, the brand has not been able to overcome the challenges posed by the apparel market, which is expected to result in a slower than expected progress of the brand revitalization plans. The company’s flagship and tourist stores are anticipated to weigh heavily on the results, as a result of the persisting traffic headwinds.

Abercrombie & Fitch Co. ("A&F") a specialty retailer operates stores and direct –to-consumer operations through its subsidiaries. Incorporated in Delaware in 1996, Abercrombie & Fitch Co. under the Abercrombie & Fitch, Abercrombie kids, and Hollister brands sells: casual sportswear apparel, including knit and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters, and outerwear; personal care products; and accessories for men, women and kids. The Company also operates stores and direct-to-consumer operations offering bras, underwear, personal care products, sleepwear, and at-home products for women under the Gilly Hicks brand. A&F operates over thousand stores in North America, Europe and Japan.

COMPANY PROFILE Abercrombie & Fitch Co. is a leading specialty retailer encompassing three concepts Abercrombie & Fitch, Abercrombie, and Hollister Co. The company focuses on providing high-quality merchandise that compliments the casual classic American lifestyle. The merchandise is sold in retail stores throughout the United States and through catalogs. The company also operates an e-commerce website at www.abercrombie.com, a kids website at www.abercrombiekids.com, and publishes a magalog called the A&F Quarterly. Abercrombie & Fitch, which targets ages 18 through college, went public in October 1996 and spun-off from The Limited in May 1998. abercrombie kids (ages 7 - 14) was

Until recently, Abercrombie and Fitch’s business model was not focused on customer satisfaction, but on exclusivity, a sultry attitude and a cooler than thou ambiance giving it a very strong brand presence (Kang, 2005). Abercrombie and Fitch employs a focus differentiation strategy with a very specific target demographic. Their products very highly priced in comparison to their competitors. Abercrombie and Fitch walks the casual and luxury line enabling it to charge high prices. The target demographic is attracted to strong brands, fashion and value. With the recent improvement in customer satisfaction, the brand should continue to realize greater revenue than its direct competitors.

The research draws attention to the fact that in 2009, the US stores generated 81.2% of Abercrombie and Fitch’s net sales. The shares of international stores and direct-to-consumer net sales were very small in comparison. Over the next two years the US stores decreased net sales percentages while net sales increased. Further investigation reveal that the US market shrinkage

Owners disagreed on what they wanted to do in the company and a year later Abercrombie sold his shares. Fitch pivoted the focus of the company a little. Abercrombie and Fitch besides selling sporting goods, also offered other general retail apparel including women’s clothing starting from 1910.

Abercrombie and Fitch Co. (« A&F ») is an international fashion retailer selling apparel, fragance and luxury products to young customers. The brand describes itself as « casual luxury ».

H & M Hennes & Mauritz AB is one of the largest clothing-retail companies in Europe and across the world. The mission statement of the company has been to enhance quality and affordability. The company operates in more than 60 countries globally where it has also established physical stores (Alexander, 13). H&M has a strong financial performance, which is attributed to pricing strategies, product promotion, and its effective distribution channel. H&M has online stores that allow customers to place and receive the goods at their convenience. While the company continues to post positive financial performance, it still faces internal and external challenges. The change in tastes and preferences in the fashion industry has a negative effect on the company.