Retail In Distress:Has Abercrombie & FitchFinally Peaked?

Last weekend we told you to go out and shop because absolutely everyone was on sale -everyone, that is, except for Abercrombie & Fitch.
Today brings reports that Abercrombie has been hit just as hard, if not harder than every other retailer after last month's business virtually ground to a halt.
Third quarter sales compared to last year were down an overall 14% over all its divisions and margins shrank dramatically. What that means is business was way off, to a point that would require drastic action.
Abercrombie, however, is sticking to its highly limited markdown policy, and appears to have done done nothing to stimulate business. Even the famous line at its Fifth Avenue Gay Bar flagship has been looking wan lately.
Now here at The Shophound we practically made our name by needling Abercrombie & Fitch. Like a closeted frat boy who can't move past his glory days, A&F always seems to be offering the same thing every season, stuck in a time warp when cargo pants were still a hot new item. We have long since lost a desire for anything they might have to sell, but we admit to strolling into the Fifth Avenue store every now and then because we remain curious as to whether they have actually thought of anything new to offer (usually not) and because everyone who works there is so damn pretty.
Since its relaunch during the 1990s, Abercrombie has continually defied naysayers who have claimed that their products are too expensive and differentiated more by label and logo than design. It has continued to grow...until now.
Our question is, has the chain finally reached its saturation point at the exact moment when the economy is taking a sharp downturn? Has everyone who wanted a logo t-shirt and cargo shorts (or two or three or twelve) finally got one? Has a younger generation of customers emerged which, true to typical form, may have rejected the style of its older siblings for something fresher, like our other bête noir (and erstwhile advertiser), American Apparel? We tend to suspect that Abercrombie's faithful customers, when faced with the usual assortments, are less tempted to add more of the same things they already have to their wardrobes.
Conventional wisdom would suggest that this would be a good time for the store to update its image and assortments, and finally move on to a more contemporary look, but CEO Mike Jeffries seems inclined to stay the course and ride out the storm. "We are mindful of the current environment and will continue to operate the business with a seasoned and disciplined approach, looking for the efficiencies within our operations,” he is quoted in WWD, and the company has barely reduced its aggressive store opening plans, with a whopping 94 new locations planned for 2009. Other analysts are less confident, however.
As irksome as we find Abercrombie & Fitch, and we do find them very irksome for all sorts of reasons, we don't want to see them go away entirely. After all, that's a lot of people's jobs at stake, and somebody needs to provide gainful employment for those shirtless hunks standing in the doorways. It would be interesting, however, to see them update their image. After all, even the most popular stores get left by the wayside if they can't stay modern and vital. Abercrombie has had an excellent run, but we have to wonder if, after nearly a decade and a half, their moment may be coming to a close.
Penney's, Abercrombie Share Tough Q3 Fate by Evan Clark & Alexandra Steigrad (WWD)
Our previous Abercrombie & Fitch coverage can be found HERE.

Comments

[emmy]

Makes for interesting reading; I wonder how many of those 94 stores are opening in international locations such as England and Canada, where they still have cachet (and not yet overstayed their welcome)?

[B]

I find it disheartening that the Abercrombie brand is so popular with people throughout Europe and/or Canada. The hallmarks of Abercrombie represent the worst of American culture. It's gross, but people eat it up overseas.

The A&F shopping bag, with its half-naked torso beaming at you, is still the most visible one on Fith Avenue. I'm sure in the malls across America, howevs, it's tired.

Bravo to you guys for suggesting they overhaul their image. Cute as their "models" are who work in the store, the hyper-sexualized-prepster-frat-boy-on-crystal-meth-look is downright unattractive.

[Ian]

hey the "hyper-sexualized-prepster-frat-boy-on-crystal-meth-look " is my dating pool!!!!