How long before Abercrombie & Fitch’s rebranding takes hold?
After years of negative comps, Abercrombie & Fitch (A&F) is in the early stages of a rebranding effort aimed at making it the preferred apparel brand of 18- to 25-year-olds. Unfortunately, there is scant evidence the chain will succeed after posting a 13 percent decline in same-store sales during the fourth quarter when it launched the largest advertising campaign in the company’s history.
For years, A&F promoted its business with images of scantily clad teenagers. The chain, under CEO Mike Jeffries, was criticized for excluding consumers and prospective employees who did not fit its beautiful teen image. Ultimately, the A&F lost the cool factor that once had teens wearing clothing emblazoned with the company name. Mr. Jeffries stepped down in 2014.
Last month, A&F named Fran Horowitz, the chain’s president and chief merchant, as CEO. Speaking on yesterday’s earnings call with analysts, Ms. Horowitz said the chain’s rebranding effort fell short during the fourth quarter.
“While the campaign generated over one billion media impressions, it did not convey clear enough brand identity to our customer and did not have a meaningful impact,” she said (via Seeking Alpha). “Based on our learnings we understand that we need to sharpen the brand identity, create an invitational message and evolve the creative.”
A&F’s CEO maintained that the chain is on the right track with its messaging. She said more than 80 percent of the chain’s sales come from customers 18+. She also pointed to other areas of opportunity, including A&F’s new prototype store, which opened at the Polaris Fashion Mall in Columbus, OH last month. The 4,860-square-foot store, which features denim and fragrance shops-within-the shop and new fitting room suites with individual “capsules” for privacy, is one of seven the chain plans to build this year.
Neil Saunders, managing director of GlobalData Retail, doesn’t see the chain’s marketing coming together, CNBC reports.
“Not only is the message confusing and opaque, but the promise of change that it suggests is not entirely delivered on by stores, which look and feel the same,” Mr. Saunders told investors.
- Abercrombie & Fitch’s (ANF) Fran Horowitz on Q4 2016 Results (Earnings Call Transcript) – Seeking Alpha
- Abercrombie & Fitch insists it’s not a teen retailer as it struggles to shed its sexy reputation – CNBC
- Abercrombie’s Marketing Shift Fails to End Sales Slump – The Wall Street Journal
- Will consumers buy a new vision for Abercrombie & Fitch? – RetailWire
- Abercrombie is abandoning teenagers – RetailWire
DISCUSSION QUESTIONS: Is Abercrombie & Fitch is on the right track targeting an older demographic? Does the chain need to speed up openings of its new format store to make its rebranding work?
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9 Comments on "How long before Abercrombie & Fitch’s rebranding takes hold?"
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Principal, Cathy Hotka & Associates
Abercrombie’s rebrand may or may not work, but the larger story is the cataclysmic change in consumers’ buying habits. Yesterday I walked past a shuttered Saks, a shuttered Ann Taylor and a soon-to-be-shuttered BCBG Max Azria. Branding wasn’t their problem. If consumers can find great apparel items at 10:00 p.m. while sitting on the sofa, physical retail needs to get much, much more compelling. It’s time for a Marshall Plan for retail.
President, b2b Solutions, LLC
How effective is the messaging when A&F tells consumers they have changed but stores look the same? My answer is not very.
The marketing campaign says they changed, but when a customer walks by or even into one of their stores, it’s the same. The campaign makes a promise that the brick-and-mortar reality doesn’t fulfill.
Brick-and-mortar stores have an uphill battle with internet shopping as it is, making promises that their stores don’t live up to certainly won’t help.
Founder, CEO & Author, HeadCount Corporation
A 13 percent comp decline in the face of the largest ad campaign in the company’s history (on top of negative comps in Q1, Q2 and Q3) is ominous. To say that the “rebranding fell short” is a profound understatement. With results this challenged, I find it more than underwhelming for the newly appointed CEO to suggest that they need to “sharpen the brand identity, create an invitational message and evolve the creative” in order to turn the business around. Based on the results, Abercrombie & Fitch needs to take far more aggressive and decisive steps to turn this around — time is not on their side.
CEO, Motista
In targeting the younger end of the Millennial generation, Abercrombie & Fitch is going after a demographic that is notoriously fickle, doesn’t respond to traditional advertising and marketing campaigns and prefers shopping online to shopping at brick-and-mortar stores. The massive ad campaign and focus on new stores won’t cut it. The retailer has to take two strategies: First, they have to put more effort into their online presence as they are planning for physical stores in 2017. Second, their ad campaign needs to be reconfigured to appeal more directly and more emotionally to their consumers. The new campaign made a good first step by stepping away from their sexualized marketing campaigns of the past, and more towards “effortless style” that has more of a direct and emotional appeal to the people that buy their brand.
CFO, Weisner Steel
I don’t have the answer to “how long,” but I’m pretty sure it isn’t one quarter. That having been said, AF has their work cut out for them … and then some. The brand was an extreme example of peddling image — in this case a PG-13 version of Hooters — and without that they’re just another (very) pretty face in a crowd(ed field).
CEO, GenZinsider.com
At least they got rid of all the naked people. No one wants to see that anymore. I have never been in their store because it looks like a dark cave entrance of a scary house. My sisters in college never shopped there all their life because they said their sizes are for really skinny people and their prices are craaaazy high.
Strategy & Operations Transformation Leader
The teenage market domination during the mid 2000s of Abercrombie & Fitch, Aeropostale, American Eagle and so on, has passed. Tastes in the retail world, particularly with the Millennial generation are indeed fickle. That shopping segment has moved on to other mass market fashion brands, such as H&M, Forever 21, Zara and so on.
To recover from a 13% decline in the fourth quarter, which followed years of down trending business, is a monumental challenge that A&F will be struggling with. Rebranding is the start, but clearly will not be the cure-all they are seeking to recover their once dominant place in the hearts and minds of the 15-35 year old market.
These sort of critical decisions had to be in motion years ago, when the declines started. They are up against a monumental shift in shopping behaviors.
CEO, President- American Retail Consultants
A&F is trying to evolve as the other dinosaurs perish. Only time will tell if their efforts are successful (and profitable). We only know that they must change to survive, just like their competitors.