Abercrombie Revamps Brand To Attract Customers

Abercrombie & Fitch (NYSE:ANF), a one-time iconic teen retailer, has failed to keep up with the changing preferences among consumers, and has suffered as a result, plagued with a number of periods of declining sales. The brand has in the recent past faced criticism for employing model-worthy staff in its stores, and by giving the impression it just wants good looking people to wear its clothes. Former CEO Michael Jeffries had even stated he didn’t want ugly people in the stores, commenting “That’s why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people.” A&F’s effort to rebrand its image came after the backlash it faced once a lawsuit was filed against them by a Muslim woman who claimed the company refused to hire her because she wore a traditional head scarf. The company also scored the lowest on the American Customer Satisfaction Index for the retail industry, with a score of 65, almost 10 points below the entire sector’s overall score.

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The company has undertaken a massive rebranding initiative after parting ways with its former CEO Michael Jeffries in late 2014, to move away from the reputation it had built in the last decade, because of which the company was also voted the most hated retail brand in February of this year. However, the company is taking efforts to reinvent itself, which was reflected in its men’s lineup, which fused its roots as a hunting and fishing store, with a more contemporary style. Aaron Levine, who joined the company last year as the head of men’s design, had a major role to play in this. Abercrombie released two new casual luxury lines with a refreshed design philosophy. The company’s women’s line also featured a more sophisticated and classic look. The advertising campaigns are also moving towards something more consumer friendly. The company also used Indian model and activist Neelam Gill, in its last Fall’s campaign.

A&F has also made attempts to remove its infamous logo from its merchandise. While the logos do still exist to some extent, the retailer began phasing them out in 2014. This follows from millennial consumers’ increasing preferences of clothing and accessories without labels or logos, according to a report by Goldman Sachs. While their parents and grandparents derived status from brand names, millennial shoppers would rather spend on food, technology, and vacations. With limited discretionary incomes, these consumers are moving to fast-fashion retailers, such as H&M and Zara, preferring function and practicality over ‘cool’ brand names.

Hollister, one of Abercrombie’s brands, has gained some traction from its antibullying campaign launched in 2013. It includes videos with tips to prevent and address bullying, which have been shared countless times. The company has also started deleting all existing pictures, from its website and social media channels, and shopping bags, which reflected their sexualized advertising of the past. Its new pictures will feature brighter lighting, looser styling, and a more optimistic mood, as stated by Ashley Sargent Price, the new creative director of marketing across all brands. It is also launching a new marketing campaign, to be released in two parts. The first, a ‘teaser,’ features digital spots, and billboard and transit ads, which say “People have a lot to say about us. They think they’ve got us figured out.” The second phase will include its new photos and declare “This is Abercrombie & Fitch.” It is also making changes at its existing stores, which involves increased lighting, and toning down the heavy perfume.

However, these efforts may still not be enough to turn the company around, due to the general macroeconomic weakness and the current soft state of the retail industry. Abercrombie & Fitch recently posted its 14th consecutive quarter of declining sales, while at the same time saying the comparable sales will remain challenging for the remainder of the year as well. This is a swift about-turn from the forecast the company issued in May, when it expected results to improve in the second half of the year. Lower traffic, particularly from tourists, can be primarily blamed for this. Moreover, the company has struggled to compete with fast-fashion brands, such as Zara and H&M. While Abercrombie has attempted to convert Hollister into a fast-fashion house, by hiring designers to keep up with the trends, and shifting away from the logo-centric designs, the comparable sales for the brand fell in the second quarter, after a flat performance in the first quarter. The company is also remodeling its Hollister stores, with 32 remodeled in the quarter and a further 20 to be completed by the end of the year. Additionally a new A&F prototype is being developed, which will be tested in early 2017.

Have more questions about Abercrombie & Fitch? See the links below:

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