Mapping Abercrombie & Fitch's Painstaking Reinvention Strategy

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"Effortless, all-American style." Abercrombie & Fitch works hard to embed that slogan into everything it produces these days, which now includes categories like neoprene crop tops and lace-trimmed midi dresses—quite a different look from denim cut-off shorts, a flannel and flip-flops. But it wasn't always that effortless: just a year ago, Abercrombie aimed for the "essence of privilege and casual luxury," a slogan that was more in line with the cooler-than-you brand high schoolers in the early aughts pictured Abercombie to be.

Years ago, Abercrombie's biggest media concern was paying off the Situation so that he would stop wearing its heavily logo-ed graphic tees. Now, in an effort to reposition itself as a more inclusive brand, every move is strategic. The product team has scaled back logos, there are press previews for new product lines, and the store's notoriously semi-nude male models put on shirts. Abercrombie no longer sees the color black as taboo, and stores have started stocking clothing above a size 10. The most striking change, however, was an announcement made last month that CEO Michael Jeffries was leaving the company. Bit by bit it might not mean much—plus-size options have only been around for a year, and those male models have only been clothed since the summer—but combined and coupled with the retirement of Jeffries, the changes signify a new phase of the brand, one where Abercrombie exerts a ton of effort in an attempt to find its footing in a heavily competitive and highly digital retail environment.

"If you think about Abercrombie & Fitch ten years ago, that was some of the best retail theater in the world," Craig Brommers, the SVP of marketing for A&F, told Racked. "You entered the store and we engaged your senses: sight, sound, smell, energy. I think now we have the opportunity to redefine those brand senses in the digital age, and really do a better job of connecting the physical and digital world."

To do that, Abercrombie is adamant about meeting the customers where they live now: on Instagram, Facebook, and Snapchat. It's not a groundbreaking idea, but A&F is nothing if not earnest in its pursuit of Generation Z. The brand uploads an average of four to five photos per day for its 1.5 million followers on Instagram. That's on par with mall-brand competitors Aeropostale, which counts just over 2 million Instagram followers, and better than American Eagle, which only has 819,000 followers. So far, Abercrombie has had the most social success on Facebook, where they clock in at nearly ten million likes.

Beyond the numbers on social media, Abercrombie is trying to reposition the look and feel of its product by rediscovering its heritage campus roots. "I think it's almost a back-to-the future moment for Abercrombie and Fitch," Brommers explained. "That sense of discovery, that all-American nature of the brand, the ambition that the brand has stood for, and that campus environment is something that we might have lost along the way. I think it's our opportunity to recapture some of the A&F heritage, but communicated in a more modern way than we have previously."

A quick scroll through recent brand imagery matches up with Abercrombie's new sentiment. In its most recent lookbook for spring, models are still predominantly thin, tall, and white, but they now live strictly within an aspirational campus environment filled with bikes, books, and footballs. Bruce Weber's nudity-laced images have been traded out for photos of guys dancing in onesies. The shopping bag imagery has been scaled back too, from strategically cropped bodies to a plain dark background with a simple logo running the length of the bottom edge. Abercrombie also partnered with Superga, Dolce Vita, Baggu, and others for exclusive collaborations available in store and on the brand's website.

Up until last year, typical promotional events included filling stores with thousands of shirtless guys the day after Thanksgiving and renaming the day Hot Friday. This past Black Friday, A&F stuck with advertising deep discounts and opening early on Thanksgiving night.

On the corporate side, Abercrombie underwent some restructuring early last year to better execute its new vision. Jeffries once ruled as president and CEO over the whole company, but now, Abercrombie follows a "brand-based organizational model," with different executives who preside over the company's multiple brands. Christos Angelides, a former director at UK-based retailer Next, was hired on as president of the Abercrombie & Fitch and Abercrombie kids brands in June 2014, and Fran Horowitz, who has held executive roles at Ann Taylor Loft, Express, and Bloomingdale's, was hired as brand president for Hollister in October 2014. Both started working at Abercrombie around October 20th, but product built under their watch won't start rolling out until around March.

The restructuring is similar to what other mall staples have done in recent years to revive brand interest. Ann Taylor hired a new brand president in March 2014 and by the end of last year, the traditionally sleepy workwear company was pulling out cape-trench coat hybrids and layering tunics over trousers in a shockingly cool way.

Banana Republic tasked Marissa Webb, its new creative director, with repositioning Banana Republic as a cool, desirable lifestyle brand in the same way that Jenna Lyons elevated J.Crew. Abercrombie is gunning for that same lifestyle approach. Despite reports that pointed at Abercrombie's product changes as the company's attempt to get into the fast-fashion market, Brommers insists that that is not where Abercrombie is headed. "Abercrombie & Fitch is definitely a lifestyle brand," Brommers says. "Abercrombie & Fitch is not fast fashion, and we feel like brands still matter to our target consumer."

Still, it's going to take more than selling an attractive lifestyle to make Abercrombie popular again. Robin Lewis, veteran retail analyst and CEO of the Robin Report, compared Abercrombie's obstacles to a fellow mall retailer that's had its own share of selling problems in the past. "It's not just a merchandising tweak, if you will," Lewis says. "I think the brand's had it. It's pretty much like what happened to Gap. The most recent CEO, coming out of the drugstore business in Canada, did a fairly good job of stabilizing Gap's business, cutting it back, eliminating stores, cutting costs, and stabilizing the balance sheet and the operating business. But then of course he retired because he couldn't make it grow." Gap may have pinned some of those hopes of growth on its latest creative director, Rebekka Bay (the founder of H&M's upscale, minimal Cos brand), but analysts have warned that there's a lot more that the brand has to do besides offering more desirable merchandise in order to set itself back on track.

It's no secret that right now Abercrombie's sales are hurting. The brand is closing its LA flagship store by the end of February and according to its SEC filings, net income for Abercrombie & Fitch, Hollister, Abercrombie Kids, and Gilly Hicks (which no longer operates in free-standing stores) was just over $54 million for the fiscal year 2014 (or 12 months ending February 2014). Compare that with the year before, when the company recorded a net income of $237 million. That's a significant difference to the tune of 183 million, and it's been a quick descent. In 2007, Abercrombie clocked in $475 million in net income (from 2000, the brand recorded a steady climb every single year). By 2009, though, they dipped down to just $254,000. Since then, the company hasn't been able to recover; in its most recent filings at the end of 2014's Q3, Abercrombie recorded a net income of $7 million after suffering a massive $24 million loss in Q1 of 2014.

Is the brand's comeback plan too little, too late? Lewis thinks that nothing short of a name change will be enough to save Abercrombie. "Abercrombie and Fitch, at the very best, could perhaps cut its business back enormously and perhaps tweak the merchandise, bring in some more fashionable looking apparel, get rid of the logos, all that stuff, change the marketing," says Lewis. "But they still have that Abercrombie & Fitch brand name on the name plate of the stores. So my opinion is, the worst will happen. I don't think that brand will make it. At some point down the road, they'll go out of business."

Despite the critics, Brommers and the team at Abercrombie believe that they can still reconnect with a new generation of consumers. "As our product continues to evolve, we're really excited about getting that message out," Brommers says. "Engaging with influencers, engaging with our large and global social audiences, making sure that people are walking into our stores and seeing some of that evolution is certainly a priority in the future."