*Pictured: A&F's promotion in Hong Kong
Ailing teen apparel retailer Abercrombie & Fitch (A&F) has recently stripped its controversial chief executive Mike Jeffries of his chairman duties. According to a Reuters piece, the move came out due to investor pressure to reduce Jeffries’ control over the company.
Jeffries was appointed as A&F’s CEO in 1992 to revamp the brand. Jeffries was responsible for coming up the company’s sexed-up image, with its racy ads, catalogs and topless in-store male models that the brand has become well-known for.
(See also: A&F's ad banned in Singapore)
Meanwhile, Jeffries has also created waves for the brand with his controversial jibes. For instance, Jeffries once declared that the brand only wanted to market to good looking people. The brand has also been accused of racist behaviour in its hiring practices. In the midst of the press storms these incidents created, it looked like the brand was getting away with the controversy. However, A&F's heavy focus on marketing and neglect of other elements such as product and pricing may have led the brand into its current decline.
The brand banks heavily on enforcing an “aspirational lifestyle”, in its own words. While many other brands aim for such an effect, it looks like A&F has sealed its snobby image with the above comments by Jeffries. In the midst of this, it has also kept its prices high. For example, simple tees in A&F cost an average of SG$50-80 (HK$300-500).
Its key marketing vehicle is its store experience, according to A&F in its annual report. It also markets through digital, e-commerce and social media.
All flash and no cash?
Analysts have said that the brand’s overt focus on marketing and cutting costs instead of improving merchandise to bring back shoppers is costing the brand.
Shares of the company, which is set to post its eighth-straight decline in quarterly same-store sales, have lost about a quarter of their value in the last 12 months, according to Reuters.
Just like Benetton, known for its striking ad campaigns (such as its controversial Unhate campaign depicting world leaders kissing) but delisted in 2012 as the company spiralled downwards financially, it looks like A&F may be making a similar mistake.
“In recent years, Jeffries has taken its success to his head and started to over hype the brand with overpriced clothes, the dark night club look for the stores, and topless male models standing outside the stores. All of those tactics attracted media attention but no doubt turned away many customers and therefore the inevitable decline for the brand,” said Shauna-Li Roolvink, founder of Brandhub.
“A&F is just operating in a very tough environment with the killer matrix of rise of fast-retailing, the impact of online shopping creating a whole new generation of browsers and not shoppers and plenty of new ideas by indie fashion entrepreneurs. So other than the sexy perception, customers now want your brand to be sexy in terms of pricing and availability,” said Lawrence Chong, CEO of brand consultancy Consulus.
Chong suggests it needs to start adjusting its brand strategy to a new audience. Also, this would include an adjustment in pricing and a shift in the core messaging.
Its heavy tilt towards selling sex to youth might need to go as well, he adds.
“Their retail store design (dark, heavy smelling scents, extravagant and pounding music) needs to change. I believe going lighter, cleaner and simpler is the way to go. Too many people have told me that it's "too dark" and discourages them from staying too long,” he said.