Retailer
Abercrombie and Fitch, once the leader in the fashionable teen
clothing announced quarterly profits really bellow expectations. In
June, July and August 2014 the brand registered a loss of 6 billion
dollars compared to the same period a year earlier. The teen apparel
maker known for its shocking ads, its stores with special atmosphere,
its shirtless male models and above all, for its controversial CEO
Mike Jeffries, seems to struggle to stay in style. A&F programs to close a total of 60 stores before December 31, 2014 and in order
to lose as little money as possible it has been constrained to offer crazy
sales with deep discounts to attract shoppers who have abandoned the
brand. A&F was maybe a cool brand 10 years ago, but today because
of the current economic crisis and because this famous clothing
outlet targets young people, a quite unstable market, it's
essential to be able to reconsider its strategy to be successful
again.
A&F HAS TO ADAPT ITS PRODUCTS TO CUSTOMERS' CHANGING TASTES
With
the current economic crisis, A&F and other traditional teen
stores suffer from intense competition. The winner will
be the one who will propose the cheapest and trendiest garment, and at this game A&F is not a great player. A classic A&F
T-shirt is sold for almost $30 whereas H&M proposes very nice
products from $9. And above all, today Geek is the new Fashion, which is the reason why teenagers
prefer spending more on high tech devices than on clothes.
A&F,
A BRAND FOR SKINNY PEOPLE?
The
plus sized market is becoming a huge industry in the USA: why
ignore it?
Mike
Jeffries, CEO of the brand, declared two years ago that 'In every
school there are the cool and popular kids, and then there are the
not-so-cool kids, candidly we go after the cool kids. We go after the
attractive all-American kid with a great attitude and a lot of
friends. Are we exclusionary? Absolutely. Some companies try to
target everybody: young, old, fat, skinny. You don't alienate
anybody, but you don't excite anybody, either'. A&F's largest
pants are in size 10 whereas an average American woman wears a size
14. The plus-sized woman's apparel represents
a $13.9 billion market, so how is it possible to ignore the needs
of such an important market segment ? A&F is not obliged to shout it
loud and clear, it just has to propose its current clothes in sizes better adapted to 'real people', a fact which will not impact the brand
image.
Is
this the end for
Abercrombie
and Fitch? The initial strategy which allowed the group to open more
than 1000 stores throughout the world seems now completely
old-fashioned. During the summer 2014, the
company published half-year results really bellow
expectations, a disappointing performance which is the result of
several changes. A&F hasn't changed like its clients. Now they
are older, poorer because of the crisis
and
more focused on new technologies. In
2014 teenagers and young adults prefer spending more on
high tech devices than on clothes.A&F
should be aware of this new tendency and begin a strategy in order to
propose its products at lower prices. Abercrombie
should
also open its mind to new markets like the plus sized one which has
become unfortunately a huge market is the USA.
Margaux.C
.
This article is very interesting and I agree with you that Abercrombie should modify its strategy.
ReplyDeleteThe plus sized clothes is a good idea according to the market. However, I don't know if the company has the will to change its ethic on fit sized clothes for "cool people"
The company could also expand their ranges of clothes to adults in order to keep their brand image focused on fit sized clothes.
Mounier K.
Hello K,
ReplyDeleteConcerning the plus size market A&F clearly doesn't want to target people who wear XL and more, but in my opinion it's a wrong strategy. Abercrombie is losing a lot of money and it's a very bad publicity for the brand.
A&F targets teens, it sells hoodies, jogging pants with a lot of colours etc.. and as you said the company should extend its range proposing smarter pieces of cloth for an older public. I'm sure that the brand prefers win new thin and adult customers than customers who won't correspond to its ideals..
Margaux.C
Hi Margaux! Very good article and opinion about the French company. To me, A&F should center its marketing and advertising campaign on its French image, the French Touch I mean, American people are crazy about that and this will turn around its ailing fortune. The company would work with famous French ambassador such as young "in" actors like Pierre Niney or Tahar Rahim. Don't you think so?
ReplyDeleteLéo B.
Hi Leo,
DeleteI think that there is a little misunderstanding. A&F is an American company! But why not, it could be interesting for the company to propose a French advertising campaign on the French territory! Concerning the ambassador, A&F has already a strategy concerning people who represent the brand. Its ambassadors are from its staff! But I agree with you French actors like Tahar Rahim or Pierre Niney could have been good representatives, they are young, 'nature' and 'fresh' !
Sorry Margaux, I tought it was. I feel a bit ashamed of myself. But the company can use French ambassadors such as these thow actors and should do that, really. Or A&F can also use its American image, mostly its New York image, the mix of cultures and influences. Think about it!
DeleteLéo B.