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 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 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 Expansion in new

markets Investment in

infrastructure Development of new

concepts Increasing online sales

Threats 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 18-22-year-olds

Controversy surrounding its ad campaign has added allure and exclusivity

34 consecutive quarters of record sales and earnings

Negative Parents

Organizations

Legislators

“Playboy for kids”

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