Noh Review on Companies & Industries – September 4, 2012

Bloomberg Businessweek “At Abercrombie & Fitch, Sex No Longer Sells” by Sapna Maheshwari

Overview: This article is about Abercrombie & Fitch and where it is currently positioned. A&F is going through hard times, and the author believes that it will only continue to get worse for them.

Key Lessons:

• A&F once attracted many teenagers with their sexy models, but their marketing is losing its edge. They have lost 1/3 of the market value in the past year with falling sales in Europe and the U.S.  Abercrombie shuttered 71 U.S. stores, and will close another 180 through 2015.
• A&F failed to change with the times. It’s great that they have sexy models to represent their store. But, what are they trying to accomplish here? Does the sexyness of their models mean anything to the customers? A&F no longer has the next big thing which attracts customers because their “coolness” is disappearing. On top of that, customers are less inclined to wear A&F’s expensive clothings, so they began moving on.
• Abercrombie's brand is supposed to appear rebellious, indie and different. But, the current product mix does not communicate or facilitate the brand.
• The good thing going for A&F is that they are about to expand into China and the Middle East. However, there is no saying that the brand's fading cool will not catch up with the local shoppers in Dubai and Shanghai.

Noh Review: A&F must change their current strategy because there no longer exists a core idea in it. The A&F brand is fading because their “coolness” or “sexyness” no longer strikes the consumers’ interest or desire to purchase. A&F are losing their popularity, but they are not losing their high prices. At this rate, their sales and market value will continue to suffer. They should actively conduct product research and product market survey to find out what the current trend considers rebellious, indie and different. The least that they can do at this point is to change their current pipeline of products and have the proper product mix in order to minimize the damage.

Article: http://www.businessweek.com/articles/2012-08-30/at-abercrombie-and-fitch-sex-no-longer-sells#r=com-s