Abercrombie Fitch Co Company analysis Prepared by Olga

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

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

Company Overview n n n Specialty retailer that sales casual apparel Operates under 5 brands: Abercrombie & Fitch, Abercrombie. Kids, 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

n What Abercrombie and Fitch brands are you familiar with?

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

Hollister Co. Established July 2000 n 14 -18 -year-old schoolers n 455 stores in US and Canada n Theme “So. Cal” n Logo Seagull n

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

The RUEHL Established September 2004 n Targets 22 -35 year adults n Operates 22 stores n Logo French Bulldog n

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

History n n n 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

Industry and Competitors n n n n 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

n What are Abercrombie and Fitch main competitors?

Industry and Competitors n n n Gap, Inc. , The Target Corporation Gap, Inc. , The Limited Brands American Eagle Outfitters, Inc. Benetton Group Sp. A n n 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 n Strengths Ø Ø Strong brand portfolio Strong financial performance Robust balance sheet n Weaknesses Ø Low inventory turnover ratio Limited geographic reach Ø Ø

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

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

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

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

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

Thank You For Attention