Etude de cas Abercrombie & Fitch

Abercrombie &
Fitch Co.
Company analysis
Prepared by: Olga Gnedash, Alexander
Petrushin, Brent Hanson

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Agenda
 Company Overview
 Business Description
 History
 Industry and competitors
 SWOT analysis
 Unique Sales strategy
 Recommendations and
Conclusion

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Company Overview
 Specialty retailer that sales casual apparel
 Operates under 5 brands: Abercrombie & Fitch,
AbercrombieKids, Hollister and RUEHL and Gilly
Hicks: Sydney brands.
 The company operates in the US, Canada, UK.
 Operates 1039 stores worldwide (February 2008)
 80,100 employees

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 What Abercrombie and Fitch
brands are you familiar with?

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Abercrombie
 Established July 1998
 7-14-year-old age group
 170 stores in US
 “Classic cool” theme
 Logo Moose

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Hollister Co.
 Established July 2000
 14-18-year-old schoolers
 455 stores in US and Canada
 Theme “SoCal”
 Logo Seagul

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Abercrombie & Fitch
 Established June 1892
 Targets 18-22 year-old age group
 357 stores
 Theme “Casual Luxury”
 Logo Moose

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The RUEHL
 Established September 2004
 Targets 22-35 year adults
 Operates 22 stores
 Logo French Bul dog

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Gilly Hicks: Sydney
 Established January 2008
 Operates 5 stores
 Targets 18 and up
 Logo Koala
 Theme Australia

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History
 David T. Abercrombie established Abercrombie
Co. on June 1892
 In 1904 wealthy Ezra Fitch became a co-owner
 In 1909 issued and mailed 50,000 copies of 456-
page catalog
 In 1917 A&F became the largest retailer in NYC
that sold sportswear
 In 2006 A&F opened its first store in Canada, In
2007 first store in UK

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Industry and Competitors
 Retail Industry (Special Lines)
 40,000 companies operate 90,000 stores
 Summarized annual revenue $130 bil ion
 Dominance of large companies
 Slowdown in spending on clothing
 Labor-intensive industry, high demand for qualified and
skil ed sales reps
 Two main sales seasons- fal (main for A&F) and spring

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 What are Abercrombie and Fitch
main competitors?

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Industry and Competitors
 Gap, Inc., The
 Target Corporation
 Tommy Hilfiger
 Gap, Inc., The
Corporation
 Limited Brands
 Urban Outfitters, Inc.
 American Eagle
 Wet Seal, Inc, The
Outfitters, Inc.
 Aeropostale, Inc.
 Benetton Group SpA

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Competition
Abercrombie &
American Eagle The Gap
Fitch
Established
1892
1904
1969
Revenue (billion 6.91
2.8
16
USD)
Number of
1039
697
3139
stores
Employees
80,100
20,600
150,000
Scope of
US, Canada,
US
More than 19
operation
UK
countries

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SWOT Analysis
 Strengths
 Strong brand portfolio
 Strong financial performance
 Robust balance sheet
 Weaknesses
 Low inventory turnover ratio
 Limited geographic reach

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SWOT Analysis
 Opportunities
 Threats
 Expansion in new markets
 Counterfeit goods
 Investment in infrastructure
 Increasing rental rates in
 Development of new concepts
US
 Increasing online sales
 Slowdown in the US
economy

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Unique Sales Strategy: IMC
 High integration of Marketing
efforts
 Recruits high energy “brand
reps” largely from college
campuses who dress in A&F
 Issues subscription catalog –
A&F Quarterly (350,000
Americans has subscribed)
 Issues “magalogs”

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Unique Sales Strategy
 Emphasis on high level of
service, quality, brand
image
 Targets Generation Y
 Positioning strategy
involves the use of overt
sexuality advertising
appeal

http://www.youtube.com/watch?v=9dqEcKcadUE&NR=1

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Unique Sales Strategy: Publicity
 Positive
 Negative

18-22-year-olds

Parents

Controversy surrounding its ad  Organizations
campaign has added al ure
and exclusivity

Legislators

34 consecutive quarters of

“Playboy for kids”
record sales and earnings

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Unique Sales Strategy: Store Layout
 comfortable armchairs
designed
 Large photos on the
walls
 extremely loud,
energizing trance and
dance songs
 dimmed light
 unique A&F’s scent in
the store

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Unique Sales Strategy: Web site
 Allows to download
music, e-post cards
 Provide useful
information, FAQ
 Shop online
 Watch Abercrombie TV
 Create ANFMail
accounts

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Recommendations and Conclusion
 Long-term recommendations
 Open a discount clothing store
 Invest in overseas expansion (Europe, Japan)
 Short-term recommendations
 Sponsor college events
 Strengthen rebellion and controversy image
 Emphasize on online shopping
 Review the choice of magazines where A&F places ads

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Thank You For Attention

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