Proposal For International Expansion Of Abercrombie And Fitch Into United Arab Emirates

Abercrombie & Fitch brand focuses on offering apparel that reflected the youthful lifestyle for a target audience, which was college students, designed to encourage teamwork and creativity

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

The first recommendation for this firm is to adopt a global policy and try and explore new markets so that market growth and market share can be expanded. In case of a firm entering an international market, it requires to analyze the nature of the market and suitably form its marketing strategies in alignment with its business strategy and decide whether it is more beneficial to adopt a global approach or use a strategy that is customized to suit the needs of the local customers.

A Multicountry approach is one in which as organization’s strategies vary according to the countries in which it does business (Coulter, 2013, p.202). This approach is centered on creating an advantage through differentiation. The products, marketing, and distribution are tailored and adopted to local culture and customs. Such local responsiveness is important when significant country to country differences exist (Coulter, 2013, p.203). An example of this would be McDonald’s Corporation. To appeal to the local customers’ palates in Singapore, they added rice burgers – fried beef slices served between two pressed rice cakes, to its menu.

Hollister Co. was founded in 2000 and is based in Los Angeles, California. The company operates as a secondary business for Abercrombie & Fitch Management. The company provides clothing and accessories for men and women. Hollister’s main target consumers are teenagers. Hollister retails its products through a chain of stores in the United States, Canada, and the United Kingdom. They also sell their products online. The marketing strategies that Hollister use to promote their products are by using a logo, a slogan, and informing what their products are pertaining too. Two of the marketing strategies are very effective in attracting consumers while one of the marketing strategies needs more research to be done. Because of Hollister’s well known slogan, attractive logo, and the way they use celebrities to represent their product, this makes them unique compared to other clothing businesses.

With only a few retailing stores (only two in Canada), the company has the opportunity to expand within Iran and Canada relying on its current success. Market characteristics are already known and the reputation of the company is already established. In addition, the absence of significant competitors prevents the risk of price wars (Johnson et al, 2008). As a result, market penetration engenders little risk. Emphasis can be devoted to reaching new customers without the diaspora, for instance through brand management.

I chose American Eagle Outfitters to focus on and research for the following project. American Eagle was founded in 1977 as a segment of another brand and was officially released and incorporated to the public as their very own brand in 1991 (American Eagle Outfitters Inc., History). American Eagle Outfitters is a casual clothing line that is geared towards teenagers and people in their early twenties. Their products are outdoor-based and they are a lifestyle brand. AEO sells both women and men’s products. The items they sell include, but are not limited to: jeans, joggers, jewelry, underwear, socks, jackets, mittens, hats, scarves, graphic tees, dresses, skirts, polos, button ups, etc. There are American Eagle stores in the following countries: China, Egypt, Hong Kong, Israel, Japan, Jordan, United States, Kuwait, Lebanon, Mexico, Morocco, Philippines, Puerto Rico, Poland, Russia, Saudi Arabia, United Arab Emirates, Thailand & United Kingdom (International Stores, AE). The reason I chose this company is because it is actually a company that I used to shop at when I was in high school. I have noticed since then, that their sales figures have decreased drastically and they have become quite unappealing to the public. After learning in class about companies that could potentially go international, and reasons why, I felt as if American Eagle would be a good company to research. It seems as if they have

Abercrombie & Fitch was founded in 1892 by David Abercrombie as a sporting goods store. David Abercrombie formed a partnership with Ezra Fitch and they continued to expand the company into the 20th century. When David Abercrombie left the company, Ezra Fitch became the sole owner and continued to bring success to the company. After Ezra Fitch retired the company continued under a group of new leaders until its financial fall and closing in 1977. The company was purchased by Limited Brands in 1988 and they brought in Mike Jeffries to revolutionize the image of Abercrombie & Fitch to a youthful fashion retailer. By the 90s, there were dozens of Abercrombie & Fitch stores located all around the United States. On September

Continuing growth overseas highlighted the next years. The company’s presence not only grew in Europe, but also expanded through mergers, licensing agreements and acquisitions to many parts of Asia and even the Middle East. Today the company is still growing and is opening state of the art stores in new untapped markets. In 2010, Neil Austrian reassumed the job of interim CEO and despite rumors of a possible buyout continues to guide the company’s expansion.

The Supreme Court ruling of, 'Equal Employment Opportunity Commission( EECO) v. Abercrombie & Fitch Stores Inc, is a religious rights’ in the workplace case In 2008, a Muslim-American teenager with Palestinian origin by the name of Samantha Elauf, applied for a job as a salesperson at Abercrombie & Fitch kid’s store in her hometown in Oklahoma. Ms. Elauf is a devout practicing Muslim and believes her religion requires her always wear a headscarf. According to evidence submitted by the EECO on behalf of the plaintiff, the Assistant Store Manager who interviewed Ms. Eluaf, “told her she would call her…to…her know when her orientation was…but…Elauf never got a call, and her friend Farisa told her three days after the interview that the district

5.0 RECOMMENDATIONS 5.1 Transnational Orientation Strategy As a consultant, I will recommend Costco to follow transnational strategy, whereby Costco should balance the desire for efficiency with the need to adjust to local preferences within various countries. Transnational strategy involves operating in different world markets, customizing responsive organisational structures and establishing value-added competencies that exploit national similarities and differences. The principal characteristic of transnational strategy is the differentiated contributions by all units to integrate worldwide operations. It requires a global vision as well as a balance between the need of adaptation to satisfy the local markets and the need to obtain global

The retailer announced their decision to continue a plethora of store closings after suffering a $63 million loss for Q1 of 2015, worsened by the fact that their losses exceeded the expectations of market analysts (Investopedia). Following the absence of CEO Mike Jeffries as of June 2015, Abercrombie’s stock dipped to its nearly annual low of $19 per share. The company continues to increase promotional efforts while offering uncharacteristic discounts in an effort to lure consumers back into their stores despite weakening profit margins. Abercrombie & Fitch has also furthered its efforts to expand and improve its e-commerce site to develop a more user-friendly shopping experience in the wake of over 200 required store closings nationally. While Abercrombie’s Executive Chairman, Arthur Martinez, attributes the company’s losses to a transitional phase that will likely take several quarters to reflect results of their strategic efforts, analysts continue to suggest that its unlikely consumers will return to the brand despite its new incentives (Forbes Contributor). Currently, Abercrombie’s dismal annual report and small scale efforts to rebrand itself makes it a risky investment option, albeit has potential to improve in the future given their focus on improving their online presence and providing a better return for investors.

Established in 1892, Abercrombie & Fitch marketing strategy has always been to target those between the ages of 18 and 22. A&F’s gross sales have been $539 million in 2008; however sales have dropped by 5% from the previous year due to the recession. In order for sales to improve our marketing consulting team has developed an internal analysis, which identifies, assesses, predicts, and accommodates the human resources, technology, finances and operations that A&F possesses. The internal analysis explains how these possessions, which have helped the organization until present time, can be used to help increase sales during this recession. Furthermore, the

The internationalisation of retailing is defined by Treadgold (Wigley et al, 2005) as having “visible” and “invisible” dimensions. The Invisible dimension has been defined as the international sourcing of products and services and the cross-border transfer of management expertise in the form of managerial policies or technical skills (Kacker, cited Wigley et al 2005). This refers to the aspects of the business which are intangible, such as marketing knowledge. On the other hand, for the visible dimension, the fashion retailer’s internationalisation is the operation of retail shops within foreign markets (Hines & Bruce, 2001). In this essay I will outline why I believe Urban Outfitters, a high street fashion brand, should expand its international presence by suggesting possible areas for internationalisation. Urban Outfitters (UO) operate 130 stores in USA, Canada and Europe and have made early steps to move into Asia. I also aim to discuss which brand strategy should be developed and whether alternative retail channels should be used to facilitate this expansion, focusing on the customer as a key ingredient for organisational success. I will be looking at UO’s existing international presence as well as considering further growth. I will be looking at a number of issues and complexities which impact on the internationalisation of retail brands, particularly the impact these factors have on the fashion industry and how the brand can alleviate ethical concerns. For this I will

Being an upscale industry, Abercrombie and Fitch would appear to be a successful corporation. Although the company was once successful for a number of years, it’s apparent that there has been a significant decline in its overall appeal and how much revenue the company acquires each year. With just over 1,000 retail stores in the U.S., Canada, and Europe, Abercrombie and Fitch has thrived to be one of the most avid corporate extensions.