Case Study : Abercrombie And Fitch

1780 WordsApr 14, 20178 Pages
Abercrombie & Fitch has become a well-known clothing store in many household homes in the last decade whether it’s from their various scandals or their over-sex ads, everyone is familiar with this clothing brand. However, Abercrombie was not always the teen clothing store, when it first opened in June of 1892, it targeted hunters and fishermen by selling hunting and fishing equipment and was originally called David T. Abercrombie Co. By 1904, the company officially got its name of Abercrombie & Fitch when a portion was bought by the high profile lawyer, Ezra Fitch. This company was once the “greatest sporting goods store in the world,” (source) bringing in customers such as Teddy Roosevelt. Despite its success, the company filed for…show more content…
It is important to note that although A&F owns separate other companies including Hollister and RUEHL, this research will only pertain to the effects this incident had on Abercrombie & Fitch. However, the question arises as to whether A&F’s decline in the past years can be traced back to a single event, the controversial statement, or whether it has been more of a continual process in which the demand for their product naturally decreased due to changing fashion trends. Although Abercrombie & Fitch had it’s peak years in the late 90s after the release of a hit song, Summer girls, which featured their brand, 2007 will be the starting year to reference to during the change and years after the change. In order to determine the equilibrium quantity and price of Abercrombie & Fitch during 2007, I used data covered in the annual report for A&F. In 2007, Abercrombie & Fitch had a net sale of about $1,638,929,000. The average unit of retail sold for $34.43 and from there I was able to calculate the quantity sold to be 47,601,771. This means that if in 2007 the company had supplied only this number of products for a $34.43 price, the market would be at equilibrium. This had seen a 0% increase in the net sales from 2006. It is important to note that after 2007 began a recession from about 2008-2009. Therefore, I chose 2007 despite it being more than 5 years before 2013 since 2008 would not have accurately show the decrease in sales due to the
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