The teen retailer, Abercrombie& Fitch, frequented by preppy and status-conscious kids, has gone out of style. No matter how much it believedand banked onthat kids would never, ever, ever abandon its stores filled with sexy clothes and half naked men, they did, and in record numbers.
It tried to ride out the recession maintaining its high prices, an arrogant mindset that turned off its customers. Most other marketers were listening to customers and acting accordingly, some by lowering prices, others by adding value, offering money saving options and suggestions or reworking messaging to relay compassion to worried, cash-strapped customers.
Abercrombie and Fitch has crash-landed and is now trying to play catch up by lowering prices and introducing fashion trends it missed, like dresses. The company reported a second-quarter loss last week of $26.7 million, its third consecutive quarter showing double-digit sales declines. Sales dropped 23% to $648.5 million. Direct-to-consumer sales dropped 13% to $48.7 million. Employees are getting pink slips and the doors are being boarded up on its even higher-priced Ruehl chain.
CEO Mike Jeffries said, We continued to be confronted with very challenging conditions during the second quarter. We believe we are doing the right things to address those challenges and improve our domestic business.
Is it too late?
Many Abercrombie shoppers have turned their attention to Aeropostale and American Eagle Outfitters, two of the companies sweeping up the broken bits left by Abercrombies bad decisions.
Even if kids still want to shop at its stores, parents are saying no. The glimmer of hope Abercrombie may have seen of laterising stocks and consumer confidencehas all but disappeared as stocks have slumped again on worries that consumers are still clinging to their wallets.
Abercrombies recent financial report also suggested it has cut its marketing budget. Another bad move at a time when it should be letting its customers know it has finally come to its senses.
