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Reinventing an American Icon:

Abercrombie & Fitch

Reinventing an American Icon: Abercrombie & Fitch Manal Akhtar Katrin Franye Jason Ip Chuk San Mike

Manal Akhtar Katrin Franye Jason Ip Chuk San Mike Kaminski Alejandro Brusi Montero Zhengran (Max) Zhu

(211532876)

(214002711)

(212286613)

(212084133)

(214011597)

(212140000)

MKTG 4321 S Dr. Markus Geisler April 6, 2015

0

Table of Contents

EXECUTIVE SUMMARY

2

INTRODUCTION

3

INDUSTRY LANDSCAPE

3

ANALYSIS

5

SWOT ANALYSIS

5

MYTH MODEL PERSPECTIVE

7

CUSTOMER EXPERIENCE DESIGNS

8

PROBLEM

9

ALTERNATIVES

10

RECOMMENDATION

14

IMPLEMENTATION

16

CONCLUSION

18

APPENDICES

19

ENDNOTES

22

EXECUTIVE SUMMARY

Starting out as a small athletics supply store to becoming one of North America’s most

recognizable brands, it is undeniable that Abercrombie & Fitch (A&F) has a long and storied

history in American culture. That history is also filled with brilliance by way of innovation and

rebranding, as well as defeat through bankruptcy and controversy. In fact, Abercrombie & Fitch

has had its fair share of issues in terms of controversial practices and the inability to rebrand and

reposition itself in the retail industry and in the minds’ of its consumers as well. Although the

company maintains its strength in its vast portfolio of brands, its weaknesses are heavily

restricting any ability for the company to make a rebound in the market. These weaknesses

include the ease of substitution by similar brands such as Aeropostale and American Eagle, as

well as the fact that their merchandise is generally sold at higher price points in comparison to

these competitive brands. The company’s focus on being physically attractive and exuberating

sex appeal combined with their “overly-sexualized” in-store experience forms the basis behind

their brand image of an all-American retailer. As a result of this belief, the company has made it

its mission to ensure that their strategy centered on inclusiveness is maintained. With the new

social trend towards beauty in all shapes and sizes, the company’s practices have been criticized

and negatively received, which inevitably led to a decline in sales and its customer base.

Alternatives to improve A&F’s current business model include: changes to their target market,

brand image, and product offering. After analyzing and weighing the strengths and weaknesses

of each alternative, we felt it would be the most beneficial for A&F to employ an initiative that

aims to change their company image. In doing so, we believe that adopting a Doppelganger

mentality to continually match up with consumer’s current tastes and preferences would be

crucial in turning around the company’s performance.

INTRODUCTION

Are you beautiful? In a perfect world, the answer to such a question would obviously be

“yes, everyone is.” However, by Abercrombie & Fitch’s standards, we would not all make the

cut, and that is where things took a nasty turn for the company.

Although A&F was established in 1892, it did not start selling modern apparel until 1979.

In that time, the company experienced both good and bad periods serving as a large supplier of

hunting and sporting goods, eventually culminating with the company’s bankruptcy in 1977.

Following its failed attempt to focus on athletic clothing between 1979 and 1988, the company

was acquired by Limited Brands and it changed its focus entirely on modern fashion. From that

point on, the company not only experienced massive financial success, but it also established

itself as a fashion and cultural icon.

With scandals and declining sales plaguing their every step, recent times have not been so

favourable for the company. A&F is now scrambling once again to promote a more positive

corporate image, which saw long-time CEO Michael Jeffries stepping down from the company

and bringing in a wider range of sizes. However, the question still lingers to what else the

company can do to get itself out of this sticking situation and once again become one of the top

American retailers of clothing.

INDUSTRY LANDSCAPE

To get a better idea of the current state of A&F, it is useful to examine its industry

landscape as well as the present status of some of its competitors. Although retail sales took a

massive hit during the financial crisis of 2007-08, current retail sales have bounced back and are

nearly at the levels of those before the crisis. As the economy continues to improve with job

creation as well as the expected increase in disposable income due to lower gas prices, retail

sales are also expected to increase. But one thing has changed - where consumers shop. Rather

than shopping at individual brand boutiques (i.e. American Eagle, Aeropostale or A&F),

consumers are now choosing to spend their money at larger retailers who offer a greater selection

and often at lower prices. These include stores like H&M, Forever 21 and Zara where consumers

are often less brand conscious and prefer to have the freedom to choose from many brands and

different fashion styles.

Nevertheless, boutique brick-and-mortar stores are still a major driving force in the retail

fashion industry. While A&F is struggling, - their 2015 first quarter earnings report fell short of

analysts’ expectations and management has withdrawn $80 million from its cash reserves i - they

are not alone in this situation. In fact, Aeropostale (who targets the 14-to-26 age group) has

experienced declining sales with many financial analysts predicting financial losses for the firm

in the near future. Both companies however, rely on physical locations to drive their sales, as

their stores account for roughly 90% of sales. Their third competitor - in terms of both fashion

and target market - American Eagle (AE) also finds itself in the same position with declining

sales and a loss of relevance. More recently, AE has seen its stock prices surge due to a new

market strategy that attempts to broaden its consumer base and offer more incentives through

promotions (but fewer discounts) for consumers to shop at their stores. ii

Despite this and the reduced appeal of in-store shopping, A&F still has the opportunity to

maintain its profitability and image. Retail sales are still powerful, particularly during the holiday

season, and companies such as AE have proven that retailers are able to emerge from temporary

slumps. It is now up to A&F to make the necessary changes to succeed in the evolving market

environment.

ANALYSIS

To further identify the opportunities that can be explored in the retail sector, below are

three models that position A&F’s brand within their external environment.

SWOT ANALYSIS

Please see Exhibit A for a condensed version of A&F retail environment.

Strengths:

A&F has a strong and varied portfolio of brands under its umbrella, catering to a range of

age groups including Abercrombie, Abercrombie Kids, Hollister and Gilly Hicks. According to

its 2014 annual report, A&F’s brands can be found in malls across the world, operating 843

stores in the US and 163 stores abroad. iii Despite having a low global presence, the company

still has strong brand recognition - affiliated to its nationality - and its major presence in the

States obviously reinforces that message. Lastly, A&F has a strong e-commerce presence as total

online sales totalled 19 percent of overall sales in 2014. iv

Weaknesses:

Two of A&F’s four brands, Abercrombie and Hollister, carry related products with

similar prices and can easily replace one another as substitutes. Without differentiating their

brands through intensive marketing efforts, A&F is unable to maximize the benefits from each

brand, which increases the risk of cannibalization by one of them. The American retailer is also

extremely reliant on the US market; for instance, 52% of total sales were attributed to the US and

the remaining 48% were from international sales and direct-to-customer sales (Exhibit B). v

Therefore any changes in American consumer preferences or macroeconomic factors will

heavily impact Abercrombie’s financial performance.

Almost all of A&F’s products offerings are targeted to millennials yet are priced

extremely high relative to competitors such as Aeropostale and AE. For example, denim jeans at

Abercrombie generally retail for $68-$88 whereas similar jeans at Forever 21 retail for $25. vi

This can essentially limit the amount of merchandise bought at Abercrombie & Fitch, seeing as

most young consumers buying from the clothing brand do not have the disposable income

necessary to make frequent purchases. Current brand image and marketing tactics also give rise

to the company’s lack of focus in regards to an online presence.

When shopping at an

Abercrombie & Fitch store, customers tend to find loud music, dim to no light , heavily scented

perfume, alluring pictures, a disorganized layout, all while being served by extremely attractive

staff members. This would be ideal if the store was catering to teenage boys and girls, but this is

a major turnoff for several other people. (Exhibit C)

Opportunities:

As long as American values continue to resonate with local consumers, A&F has the

potential to gain deeper penetration in foreign markets, particularly in China and Japan. With the

rise of e-commerce and a strong online platform, A&F will also be able to remain in a

competitive position going forward, as it already grasps many of the first-mover advantages in

this area. Lastly, the men’s and women’s apparel industry is improving in the wake of the Great

Recession, posting 5 and 4 percent growth respectively in 2013. vii These numbers are a

promising indicator for A&F and retailers alike in the industry.

Threats:

More notably, A&F has been subject to negative publicity in the last three years due to

their discriminatory hiring practices and the offering of small clothing sizes for females. These

decisions have caused a damper on their performance, which was apparent in 2013 when their

sales dropped by 11 % in comparison to 2012. This was also the same time when Mike Jeffries’

remarks resurfaced which regarded only targeting thin and “cool” college and high school

students. viii Overemphasis on the American market is also a potential threat as it is not consistent

with the globalization of the retail fashion industry. Brands such as ZARA, H&M and Uniqlo are

still expanding in the US and therefore pose a viable threat to A&F’s key market share. ix

MYTH MODEL PERSPECTIVE

A&F fulfills the myth of an attractive and popular all-American collegiate individual.

Purchasing from this retailer essentially signifies a desire for belonging and the need to showcase

the group one belongs to. Take for instance, Abercrombie & Fitch’s hiring practises where the

company claimed to only hire “good-looking” people in their stores and then labelling them as

models rather than associates. This not only strengthens the myth model centered on this vivid

brand image, but it solidifies the fact that Abercrombie & Fitch does not appeal to everyone. This

element of exclusion is essentially what separates the cool kids from the rest of the pack, and

wearing Abercrombie & Fitch was an apparent way of making this clear to others. Its target

market is geared towards attractive teenagers who embody the all-American look that the brand

prides itself on. Having blond hair and blues eyes and a physically fit body were definitely things

related to A&F’s preference for a Caucasian brand image geared to popular Caucasians. This

was highly apparent both in stores through the look of its employees and its print advertisements,

especially on its shopping bags. A brown bag with a guy’s abs was just one of the ways for

consumers to distinguish the brand from others, which not only feeds into the myth of wanting to

belong to the popular clique, but it strengthens Abercrombie & Fitch’s brand image tenfold.

(Exhibit D)

CUSTOMER EXPERIENCE DESIGNS

For a sample experience of a generic A&F store layout, please see Inside Abercrombie and

Fitch on YouTube (https://youtu.be/6XX1jneTna0).

Ultimately, the perceived landscape is what carries out the myths and brand image that

A&F designs. Regardless of its provocative images, pungent cologne and unbelievably attractive

models, the brand produces a physical dimension that successfully stimulates its loyal shoppers

and simultaneously irks its vocal opponents (“haters”). This dimension enables their servicescape

to be more humanized. In a post by GQ’s senior digital editor and social media genius John

Jannuzzi, his recent visit to A&F made him feel like a kid again and - like many others of the 90s

generation of A&F customers - repeatedly referencing to the familiarity of its scent, lack of

lighting and change rooms as he revisited them. x The rush of memories and emotions gave him a

source of familiarity that is nowhere as striking in other stores, going to show that A&F’s bold

tricks and experiential tactics are extremely effective in building human connections and a

humanized environment overall. Striking as it may seem, the unappetizing retail design cues

helps them carve a greater mind share in the minds of all customers and explains why it hesitated

to redesign its stores following its troubles after the 2008 recession. xi

Considering the other environmental dimensions left out of M.J. Bitner’s research on

servicescapes, the spotlights and dark-lighting of A&F’s stores help reduce the perceived social

density of its stores to the passerby. xii Further augmented by tightly-drawn shutters and loud

music, customer-to-customer interactions are limited and customers are left to experience the

store design by themselves. (Even if they were with somebody else, it would be hard to share

thoughts over the loud music) This is an important control for A&F for many reasons:

i.

It mitigates the impact of undesirable customers - fat, loud, obnoxious, etc. - on their

desired customers, which could prompt them to leave

i. It reduces the shopping stories shared by customers on formal and informal social

networks (i.e. “I was shopping at A&F once and I saw

”)

A&F’s employees are also renowned for poor customer service, as their employees are

inadequately trained and are mainly focused on keeping the merchandise neat and folded. xiii

While this may reject customers seeking an emotional connection to the store, it helps A&F

standardize the customer-employee experience across all its 567 stores and, again, making it

appear that the entire store was designed for “you” (ruffled clothes indicate the presence of other

customers).

In sum, the lack of emotional proximity that A&F’s employees provide to its customers

enhances their brand performance. The richness of their physical and social cues - from images

of playful, vibrant youth to the perceived seclusion one feels as they shop - provides customers

with a one-of-a-kind consumption experience amongst hundreds of similarly-designed stores in

large shopping malls across the globe. Best of all, it delivers its product differentiation at a very

low cost as the largest cost driver for retail businesses (labour) is standardized at minimum wage.

xiv

PROBLEM

Where exactly did A&F go wrong? Firstly, its branding strategy was built around

adhering

to

the

company’s

all-American

look

through

sex

appeal.

As

a

result

of

this,

Abercrombie & Fitch established itself as the epitome of what is meant to be “cool” for its

teenage target market. In doing so, the company alienated many groups of people on the basis of

only going after the attractive consumers who fit the aforementioned look policy. This strategy

was nevertheless more apparent when Jeffries expressed his reasoning to only target the

attractive all-American kids and to exclude those who do not belong to this model. Positioning

the company in such a way has given rise to many other problems ranging from discrimination in

the workplace, its employment practises, and its treatment of customers.

ALTERNATIVES

In order for A&F to turn their business around, it must significantly alter its business

operations in order to embrace the change in customer preferences and the emergence of new

trends. Below are three distinct alternatives that Abercrombie & Fitch can undertake in order to

respond to such things. Each one of the alternatives focuses on one of Abercrombie & Fitch’s

key areas of interest: the target market, the company’s image, and the company’s product

offerings. The following section will detail some strengths and weaknesses for each alternative,

based on criteria we have set, and deliver a final recommendation.

Alternative One - Target Market Evolution

As the initial generation of teenagers has grown out of the Abercrombie & Fitch brand,

the company must align its brand message along the same path that society and its audience have

taken. It must continue to cater to the same age demographics it always has (teenagers and young

adults) as they are the most vulnerable to brands with strong identity values. They are also the

most active brand ambassadors any retailer can mobilize in this market segment, as they interact

with hundreds of other members of the same target market on any given weekday, often sharing

the brand’s storyline. A&F however, needs to redesign its promotional strategies for the “2015

Teenager.” One who prefers to be “the brand” himself or herself rather than a person that

embodies a few specific brands. Brought on by the power of digital and social media,

particularly Instagram, young adults now possess the technological channels to build their own

brand images and “(nourish) the significance of individual voices and the power of the one

persona behind them.” In the words of Marcie Merriman, former director of brand strategy at

Victoria’s secret, social media and style blogs have given teenagers the impetus to develop

individual styles rather than sharing ‘trend’ uniforms or “must-haves” with their peers. xv As a

technology of power, A&F can adopt a cultural image of a techspressive force and join forces

with today’s teens to help them express themselves better. Be on their side!

The second component to this alternative addresses a potential contradiction to the

promotion of the aforementioned 2015 teenager. Although the company has had a history with

narrowing its clientele to only the “beautiful people” in the words of ex-CEO Jeffries, A&F risks

its business to become too focused on this specific niche, which is apparent with brands such as

Brandy Melville. Furthermore, it gives rise to naysayers who spread the image of the A&F brand

as a green Luddite technology - an inauthentic retailer that threatens to make you another victim

of their vicious branding and potentially take away from your ability to express yourself as a

brand. To address this problem, A&F should expand its definition of a beautiful person to one

that the mass majority of society accepts. It will aid in their recovery from a negative image of

being a disrespectful brand, while also helping them own a broader market presence.

Alternative Two - Changing the brand’s image

The second alternative proposes a change in the way Abercrombie & Fitch sells itself in

regards to its brand image. Its current image is built on physical sex appeal by using attractive

models and suggestive clothing designed specifically for the small and skinny. Just take a look at

any A&F billboard - one is likely to find several semi-nude young models portraying a sexually-

charged scenario while wearing A&F gear (Exhibit E). This is the dominant theme in any head-

to-head (H2H) interactions with the brand, particularly in its brick-and-mortar stores. As the

retail setting still remains as a main driver of key sales revenue for most retailers, A&F’s

physical environment may be perceived as more uninviting than inviting. In fact, the atmosphere

captured by scantily clad girls folding clothes, loud electronic dance music (EDM) and its strong

‘Fierce’ cologne sprayed throughout the store, can be seen as too focused on selling sex and

intimidating for those who do not identity with these things. On the contrary, retailers such as

Zara make it their mission to save up to 20% more energy and by mobilizing the H2H experience

to build a more powerful consumer-brand bond by forging stronger emotional attachments with

its shoppers. This alternative suggests a move away from being the “traditional sexy” brand

(physical beauty) and reinventing “sexy” by means of promoting diversity above all. By

removing its edgy, all-American sex appeal, this could essentially be going against everything

that Abercrombie & Fitch stood for, and so, this alternative would see the company embracing

this new wave of sexiness through cultural diversity both in terms of its brand image and its

merchandise and its employees. In doing so, Abercrombie & Fitch would:

i. Still remain true to the core values it represents, and the brand loyalists who

consumed the existing brand;

i. Provide its consumers with national values that they would not hesitate to embody,

share and consume (especially in the United States, their largest market).

National ideologies are always a safe choice for marketers, especially as America deals with its

fallout from the world’s economic stage, and the trend towards promoting beauty through

different looks should definitely not be ignored.

Alternative Three - Diversify the product offerings

Lastly, a third and more drastic alternative suggests that A&F change its product

offerings. Competitors in the fashion landscape such as Aeropostale and American Eagle have

struggled in recent years while H&M, Forever 21 and Zara have flourished in their business

models. What are these models? Rather than focusing on building brand allegiance, these fast-

fashion outlets have concentrated on the mass production of basic essentials and then selling

them at affordable prices; thus allowing them to realize scale economies. Their offerings are

“smart” and “timeless” in many senses, not polarizing to the normal individual yet distinctive in

their style and design. On the other hand, merchandise by A&F can only be recognized by the

large, exaggerated logos and fonts that dominate the front of every item of clothing. While this

may be appealing for the young audiences it targets, the individual that wears the shirts and polos

loses his or her position as the focal point of attention - a trait that counters the personal branding

movement we are participating in today (as described in the first alternative). A&F could address

this concern by producing more brand-neutral clothing and differentiate itself by improving the

raw materials used or changing its price structure (the average price of a full-price basket of

goods was $516, $358 higher than Forever 21 and $129 above the group average. xvi This move

however, could severely decrease the scope of audiences that learn about the brand every day.

A&F could address this in two ways:

i.

Creating opportunities for co-creative collaboration between its consumers and its

design process, by allowing them to suggest what items best define them and how

they add to their A&F style;

i. Implementing programs to cultivate brand loyalty across school campuses in North

America, representing their brand through recruited individuals rather than innocent

consumers (similar to “Avon ladies” at Avon Products, Inc.).

Each of these ambassadors will be able to infuse A&F’s storyline with their personal stories,

adding depth to the brand message and extending its longevity in the competitive marketplace.

RECOMMENDATION

Rejection of Alternatives One and Three

Given A&F’s current state of affairs, alternative one would push the brand to mainstream

popularity as it would broaden the individuals that are attracted to its brand. For most of its post-

revitalization history - after 1988 - A&F has stayed true to bringing teenagers on board with its

culture rather than adapting its culture to support the teenager. By only stocking sizes to a certain

level for girls, it becomes a mythical brand that is a sisterhood of its own and gives any wearer

the admission to its special club. Opening the doors will take away from the specialty of the club

and would demolish the foundational strategies that has made it successful all these years.

On the other hand, A&F is not positioned well-enough to broaden its clothing lines and

remove its iconic, flashy ‘ABERCROMBIE & FITCH’ top designs. Their quality, while highly-

touted, is more expensive to produce than fast-fashion giants such as H&M and Zara and any

significant price cuts could saturate the market with A&F clothing - making it less “special” and

desirable. An attempt to design clothing with their consumers may not work either; after all,

most of the thought leaders are teenagers and their opinions may not be widely accepted by

A&F’s regular teenage shoppers. And hiring brand ambassadors to deliver the brand message

makes A&F more susceptible to bad publicity, which is the exact reason why it discourages even

its own employees to interact with in-store shoppers.

Both

of

the

above

alternatives

attempt

to

help

A&F

evolve

with

the

changing

marketplace, but only resolve A&F’s problems from one dimension and leave another open for

doppelganger image attacks.

Recommendation of Alternative Two

We chose the second alternative as our recommendation for Abercrombie & Fitch so that

the company can adopt a brand image that is more appealing to a wider audience of customers

and to accept diversity rather than continue to focus on a specific set of individuals. In doing so,

the company will definitely need to undergo some changes to its operations, but we believe that

this alternative will allow A&F to maintain its status as an all-American retailer. The brand

image serves as the underlying factor in ushering in the new wave of consumers who are

culturally diverse both in their style and their preferences. Seeing as A&F was big on excluded

anything other than its all-American look, people started turning their backs on the brand and

moving to retailers like H&M and Zara, retailers that embrace diverse body sizes through their

line offerings. Responding to new or emerging trends represents the most appropriate way for

Abercrombie & Fitch to remedy this situation as its current brand image is hurting its sales and

its customers. In theory, the acceptance of diversity represents a new wave for Abercrombie &

Fitch and other retailers alike. The next step is ultimately for A&F to dive headfirst into the

incoming wave and diversify its brand image. This alternative would see the company redefine

what it means to be all-American in today’s terms. Furthermore, this definition of all-American

needs to address the blending of different cultures and styles as a way to compete in the retail

marketplace. This will show consumers that the A&F brand has more to offer than just

promoting physically attractive Caucasian models.

Furthermore, the adoption of a new brand image is much more cost efficient than

changing the retailer’s product offerings and less risky than investing in a teenage market that

adopts a new fad every few years. Though doppelganger images will arise to expose A&F’s

rebranding efforts, it is easier to revitalize A&F’s brand image and meaning than to, for instance,

reposition the clothes that they offer (which may involve new product designs, colours and

manufacturing processes). The wide availability of teenagers, its target market, is a gold mine for

A&F’s brand marketers as they can be easily mobilized as actors and actresses to help build new

mythic brand images and battle doppelganger ones as they emerge. And unlike Botox’s target

consumers, teenagers are not facing the same mid-life crises or life stories - this gives A&F the

flexibility to design their brand in many possible ways to battle the disparaging images, without

fear that it may alienate any large portion of its market.

IMPLEMENTATION

In order for Abercrombie & Fitch to change its brand image in the minds’ of its

consumers, the company must first give them a reason to alter their prior understanding and

opinions on its pre-existing methods of operation. Think of this alternative as a way to sustain

the desire to be a part of Abercrombie & Fitch, but with a more modern acceptance for diversity

both in terms of its employees and its retail stores. By upholding the company’s standards when

it comes to its clothing line, Abercrombie & Fitch can definitely implement a move towards

diversity through a more diverse workforce, new procedures in regards to its look policy, and the

promotion of different genres of music in their stores.

It comes with no surprise that sex sells and Abercrombie & Fitch is no stranger to using

sex symbols to sell its merchandise; however, this can also be perceived as intimidating for

consumers who do not identify with this all-American image. Because of this, it is important for

Abercrombie & Fitch to introduce more diverse models both in terms of its advertisements and

its employees so that this brand image which is centered on diversity can resonate with a much

larger mass of teenage individuals. In doing so, Abercrombie & Fitch still keeps its powerful

image of being all-American, but it gives consumers a reason to once again wear the clothes

knowing that the connotation of being culturally diverse is another form of sex appeal. At the

same time, it goes beyond just revitalizing Abercrombie & Fitch’s image through its promotion

of its workforce; the company also needs to reformulate its stores so that customers are treated to

a much more accepting environment to step into. Music plays a major role in setting the

atmosphere for shoppers’ retail experience and so, Abercrombie & Fitch can easily incorporate a

much more diverse playlist to really portray that culturally diverse theme throughout its stores.

Furthermore, the company could tailor their music selection so that certain songs are played

during different parts of the day, rather than constantly playing the same genre of music

throughout the whole day. Finally, Abercrombie & Fitch’s stores could also benefit by

encouraging its employees to piece together their own unique look using any articles of clothing

from Abercrombie & Fitch rather than have them adhere to a specific dress code which typically

encourages jeans to be worn cuffed and with flip flops for guys for example. As a result of this,

the company can really showcase their shift towards embracing diversity and essentially

celebrating individuality and uniqueness, but still demonstrating the all-American look that is

embedded in its clothing and its quality.

CONCLUSION

After a thorough analysis that covers Abercrombie & Fitch’s past business history as well

as the current state of their business operations, it is clear that the company is in trouble. A

controversial CEO, depleting cash reserves, controversy over company values and declining

sales all culminated into present day problems for the company. By using specific models of

marketing, the company also shows no signs of wanting to align with the preferences and ideals

of modern day consumers. It is clear that Abercrombie & Fitch needs to do something, and they

need to do it now. To shake off their controversial image and reinvigorate their business

operations, the company must undergo a drastic change to play into current consumer’s desires.

As a result of this, we believe that it would be the most beneficial for Abercrombie & Fitch to

change their brand image so that they can sustain the elements of their identity that made them

successful. At the end of the day, if Abercrombie & Fitch does not embrace change, they can

soon be left behind in the retail industry. What is truly important is being ready for the next wave

and not being afraid to ride it when it comes.

APPENDICES

Exhibit A: SWOT for Abercrombie & Fitch

Strengths

Weaknesses

Strong brand portfolio with four brands under its name: Hollister, Abercrombie kids, and Gilly Hicks brand

Strong online presence.

Brand similarity

Overreliance on the US market

Pricing isn’t in compliance with target markets’ buyer power

 

Poor in-store experiences

Opportunities

Threats

Easier penetration into other markets, due to strong brand recognition

Negative brand image. (discriminatory practices)

Improved apparel industry

Stiff competition from Zara, H&M and Forever 21

EXHIBIT B: Sales from each geographic region (Abercrombie and Fitch Annual Report 2013)

Zara, H&M and Forever 21 EXHIBIT B: Sales from each geographic region (Abercrombie and Fitch Annual

EXHIBIT C: Standard Abercrombie & Fitch store design

EXHIBIT C: Standard Abercrombie & Fitch store design EXHIBIT D : Sample A&F myth model Populist

EXHIBIT D: Sample A&F myth model

Populist World: Cultural Ideology: Youth subculture In order to be popular, one must be attractive
Populist World:
Cultural Ideology:
Youth subculture
In order to be popular, one
must be attractive and
belong to a clique
Desire to be popular and
exclusive
Identity Myth:
Desire is established
through “sexy ads” and
feeling of exclusivity in-
store (particular-sized
clothes, specific racial
preference)
Identify with myth
through ads, clothing
styles and music
Identity Position:
Lack uniqueness,
desirability and social
acceptance

EXHIBIT E: Sample A&F Advertisements

EXHIBIT E: Sample A&F Advertisements 21
EXHIBIT E: Sample A&F Advertisements 21

ENDNOTES

i <http://markets.ft.com/research/Markets/Tearsheets/Financials?s=ANF:NYQ>

ii <http://www.reuters.com/article/2015/01/08/us-aeropostale-forecast-idUSKBN0KH1B520150108>

iii A&F Annual Report 2014 <http://www.abercrombie.ca/anf/investors/investorrelations.html>

iv <http://advantage.marketline.com.ezproxy.library.yorku.ca/Product?pid=5A7C56D0-670A-41DB-A218-

EFD5FA924AD1>

v <http://www.abercrombie.ca/anf/investors/investorrelations.html>

vi <http://www.huffingtonpost.com/2014/12/03/abercrombie-sales_n_6265000.html>

vii <http://advantage.marketline.com.ezproxy.library.yorku.ca/Product?pid=5A7C56D0-670A-41DB-A218-

EFD5FA924AD1>

viii A&F Annual Report 2014 :<http://www.abercrombie.ca/anf/investors/investorrelations.html>

ix <http://www.fashionunited.co.uk/fashion-news/fashion/clash-of-the-fashion-titans-hm-vs-forever21-

2013121719445>

x <http://www.gq.com/style/blogs/the-gq-eye/2014/12/abercrombie-ceo-mike-jeffries-is-out-but-how-bad-has-it-

gotten-really.html>

xi <http://content.time.com/time/business/article/0,8599,1918160,00.html>

xii Bitner, M.J. (1992), “Servicescapes: the impact of physical surroundings on customers and employees”, Journal of Marketing, Vol. 56 No. 2, pp. 57-71.

xiii <http://www.dailymail.co.uk/femail/article-447183/Poseurs-Paradise-Whats-really-like-work-new-Abercrombie-

-Fitch-store.html>

xiv <http://www.salon.com/2012/02/04/the_absurd_life_of_an_abercrombie_fitch_model>

xv <http://www.dailymail.co.uk/femail/article-2318963/The-art-perfect-1-25-inch-turn-Inside-Abercrombie--Fitch-

staff-guide-thrown-preppy-look.html>

xvi Credit Suisse, Feb. 2015