Time - Abercrombie and Fitch: The World's Worst Recession Brand?

[Jackeens]

In this recession, there are struggling apparel retailers all across the country. Then there's Abercrombie & Fitch. The upscale teen retailer has suffered 10 straight months of double-digit same store sales declines. In the second quarter of 2009 alone, sales are down an eye-popping 30% across the company's three name outlets: the flagship Abercrombie brand, which has 567 stores, Hollister, a 520-store teen chain, and Ruehl, a 29-store chain for young adults that Abercrombie shut down in June. Abercrombie & Fitch lost $26.7 million, which includes $24.4 million in charges associated with the closing of Ruehl, in the second quarter. During the same period in 2008, Abercrombie scored a $77.8 million profit. "Abercrombie has mismanaged this economic downturn more than any other retailer," says Britt Beemer, CEO of America's Research Group, a retail consulting firm.

What lessons can be learned from the Abercrombie experience? The first has to do with pricing. As the economy spiraled downward, and competitors like Aéropostale started discounting like crazy, Abercrombie refused to lower prices. The company insisted that price-cutting would cheapen the cachet of the brand.

You would figure that discounting would provide goodwill and build customer loyalty, especially in lean times. After all, with more grateful customers in tow, wouldn't the company be in a great position to ride the upswing associated with an economic recovery, raising prices again when times get better?

http://www.time.com/time/business/article/0,8599,1918160,00.html?iid=tsmodule

[xchrom]

1. i cannot agree with manic price cutting.

we are training -- if not already trained -- people that there is no bottom to prices.

which keeps manufacturers in search of ever scheaper labour.

as long as we keep looking for the lowest possible price -- not a bad thing -- except for our fellow workers -- we stay in this cycle.
this won't be a popular post.

[angstlessk]

2. I would agree if Abercrombie et all sold ONLY AMERICAN MADE clothing

other than that..they can go suck whatever it is retailers suck when they are going down!

corrected spelling

[xchrom]

4. what ever -- there's always a caveat right?

if i don't respect a worker in india -- how am i going to respect a worker here?
basioaclly you and i agree -- i DON'T want jobs going over seas -- we have to try and find ways to through taxation etc to keep those jobs here -- but people also need to learn that making a stitch to make a shirt is good labout -- PAY FOR IT!

[corkhead]

3. Recession? Maybe being a walking billboard for a tee shirt retailer is no longer in fashion.

[Sen. Walter Sobchak]

5. Abercrombie and Fitch: One of those little intelligence tests

If you shop there, you are a fucking moron.

[NC_Nurse]

6. I bet they just aren't cool anymore. Young people are fickle and they are SOOO

5 years ago...