Abercrombie &
Fitch Co.
Company analysis
Prepared by: Olga Gnedash, Alexander
Petrushin, Brent Hanson
Agenda







Company Overview
Business Description
History
Industry and
competitors
SWOT analysis
Unique Sales strategy
Recommendations and
Conclusion
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
 What Abercrombie
and Fitch
brands are you familiar with?
Abercrombie





Established July 1998
7-14-year-old age group
170 stores in US
“Classic cool” theme
Logo Moose
Hollister Co.





Established July 2000
14-18-year-old schoolers
455 stores in US and Canada
Theme “SoCal”
Logo Seagull
Abercrombie & Fitch





Established June 1892
Targets 18-22 year-old age group
357 stores
Theme “Casual Luxury”
Logo Moose
The RUEHL




Established September 2004
Targets 22-35 year adults
Operates 22 stores
Logo French Bulldog
Gilly Hicks: Sydney





Established January 2008
Operates 5 stores
Targets 18 and up
Logo Koala
Theme Australia
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 456page 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
Industry and Competitors







Retail Industry (Special Lines)
40,000 companies operate 90,000 stores
Summarized annual revenue $130 billion
Dominance of large companies
Slowdown in spending on clothing
Labor-intensive industry, high demand for qualified and
skilled sales reps
Two main sales seasons- fall (main for A&F) and spring
 What
are Abercrombie and Fitch
main competitors?
Industry and Competitors






Gap, Inc., The
Target Corporation
Gap, Inc., The
Limited Brands
American Eagle
Outfitters, Inc.
Benetton Group SpA




Tommy Hilfiger
Corporation
Urban Outfitters, Inc.
Wet Seal, Inc, The
Aeropostale, Inc.
Competition
Abercrombie &
Fitch
American Eagle The Gap
Established
1892
1904
1969
Revenue (billion
USD)
6.91
2.8
16
Number of
stores
1039
697
3139
Employees
80,100
20,600
150,000
Scope of
operation
US, Canada,
UK
US
More than 19
countries
SWOT Analysis

Strengths


Strong brand portfolio
Strong financial performance
Robust balance sheet

Weaknesses

Low inventory turnover ratio
Limited geographic reach


SWOT Analysis

Opportunities

Threats

Expansion in new
markets
Investment in
infrastructure
Development of new
concepts
Increasing online sales

Counterfeit goods
Increasing rental rates in
US
Slowdown in the US
economy





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”
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
Unique Sales Strategy: Publicity

Positive

Negative

18-22-year-olds

Parents

Controversy surrounding its ad
campaign has added allure
and exclusivity

Organizations

Legislators

“Playboy for kids”

34 consecutive quarters of
record sales and earnings
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
Unique Sales Strategy: Web site





Allows to download
music, e-post cards
Provide useful
information, FAQ
Shop online
Watch Abercrombie TV
Create ANFMail
accounts
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



Thank You For Attention