Abercrombie & Fitch Co.

From Academic Kids

Abercrombie & Fitch is a specialty retailer encompassing four concepts: Abercrombie & Fitch, abercrombie, Hollister Co., and RUEHL. The merchandise is sold in retail stores throughout the United States, in catalogs, and online. (NOTE: This article discusses only the company's namesake concept.) As of 2005, the company operated 366 Abercrombie & Fitch stores in all U.S. states (except Wyoming) and in the District of Columbia.

History

During the beginning of the 20th century, Abercrombie & Fitch Co. was one of the most popular retail stores for America's sporting elite. The company's clientele consisted of mainly big-game hunters, fishermen, and outdoorsmen. Abercrombie & Fitch not only outfitted wealthy people, it also outfitted some of America's most influential leaders and celebrities on their excursions. Every president from Theodore Roosevelt to Gerald Ford is said to have been outfitted by the company in some capacity (Teddy Roosevelt was an especially enthusiastic outdoorsman and Abercrombie & Fitch customer, and he frequently visited the store in preparation for his famous African safaris). Other famous people to pass through Abercrombie & Fitch's doors include Charles Lindbergh, Amelia Earhart, Greta Garbo, Katharine Hepburn, Clark Gable, and author Ernest Hemingway, who killed himself using a shotgun purchased at an Abercromie & Fitch store.

Abercrombie & Fitch began as a small waterfront shop and factory in lower Manhattan in 1892. David Abercrombie, born and raised in Baltimore, Maryland, was a former trapper, prospector, topographer and railroad surveyor. He was also an inventor, an ingenious designer of tents, rucksacks and other camping equipment. It was his love of the great outdoors that inspired him to begin Abercrombie & Co., a shop dedicated to selling only the highest-quality camping, fishing and hunting gear. His clientele consisted mostly of professional hunters, explorers and trappers. In 1900, Ezra Fitch, a wealthy New York lawyer and loyal customer, expressed a desire to buy into the growing company. Abercrombie accepted his offer, and Fitch joined as a partner. Soon thereafter, the shop moved to a larger location at 314 Broadway St. In 1904, the store became incorporated and the official name of the company was changed to Abercrombie & Fitch Co.

The partnership, however, was ill-fated. David Abercrombie and Ezra Fitch were stubborn, hot-tempered men, and both had vastly differing opinions on how best to run the establishment. Abercrombie was more conservative, content to continue the store as it was, selling professional gear to professional outdoorsmen. Fitch, on the other hand, was more of a visionary. He was positive that the future of the business lay in expansion, selling the outdoors and its delights to more of the general public. The two quarrelled frequently, often violently, even as the company grew increasingly successful. In 1907, Abercrombie sold his share in the company to Fitch and returned to manufacturing outdoor goods. Fitch continued the business with other partners and was, for the first time, able to direct the company in a manner to his pleasing.

Fitch determined that the store ought to have an outdoor feeling. Stock was not hidden behind glass cabinets. Instead, it was displayed as if in use. He set up a tent and equipped it as if it were out in the middle of the wilds of the Adirondacks. A campfire blazed in one corner, where an experienced guide was always in attendance, imparting valuable information to interested customers. Part of Fitch's strategy to expand the company was the creation of a mail-order catalog. In 1909, Abercrombie & Fitch mailed out over its 456 page catalog, which included outdoor clothing, camping gear, articles, and advice columns, to 50,000 customers worldwide. By 1913, the store moved to a more fashionable and easily accessible midtown address just off Fifth Avenue, expanding its inventory to include sport clothing. A&F became the first store in New York to supply such clothing to women as well as men. In 1917, Abercrombie & Fitch Co. moved yet again to a twelve-story building on Madison Avenue. The store occupied the entire available space, making it the world's largest sporting goods store. Outside, a sign proclaimed, "Where the Blazed Trail Crosses the Boulevard."

The flagship store included many different amenities. In the basement there was a shooting range, on the mezzanine there was paraphernalia for skiing, archery, skin-diving, and lawn games. The second through the fifth floors were reserved for clothing that was suitable for any climate or terrain. On the sixth floor, there was a picture gallery and a bookstore that focused on sporting themes, a watch repair facility and a golf school, fully equipped with a resident professional. The seventh floor included a gun room, stuffed game heads, and about seven hundred shot guns and rifles. The eighth floor was dedicated solely to fishing, camping, and boating. It also included a desk that belonged to a fly- and bait-casting instructor who gave lessons at the pool, which was located on the roof. The fishing section of the store alone was stocked with over 48,000 flies and over 18,000 fishing lures. The clerks hired at Abercrombie & Fitch were not professional salesmen, but rugged outdoorsmen. Talking was their pleasure and selling was performed only at the customers' insistence.

In 1928, Ezra Fitch retired from the company. Despite the change in ownership, Abercrombie & Fitch continued to expand. In 1939, it adopted the slogan, "The Greatest Sporting Goods Store in the World." By 1958, the company operated stores in Chicago and San Francisco, wintertime-only stores in Palm Beach and Sarasota, Florida; and summertime-only stores in Bayhead, New Jersey; and Southampton, New York. The expansion continued through the 1960s, when the company opened new stores in Colorado Springs, Colorado; Short Hills, New Jersey; Bal Harbour, Florida; and Detroit, Michigan. Despite the chain's apparent success, the company began to falter financially in the 1960s and went bankrupt in 1977. Oshman's, a sporting goods retailer, acquired Abercrombie soon thereafter, but the company continued to struggle.

Abercrombie & Fitch Today

In 1988, The Limited Inc. (now called Limited Brands) acquired Abercrombie & Fitch, determined to reinvigorate the ailing brand. The Limited had been successful in rolling out new concept stores, such as Express, which sold women's clothing, and Victoria's Secret, which sold lingerie and beauty products. Over the next decade, Abercrombie & Fitch was carefully rebuilt as a teen apparel merchandiser. The company began opening stores in upscale malls across America in the early 1990s, targeting teenagers and college students aged 18-24 from higher-income families. Abercrombie & Fitch is a self-proclaimed "casual luxury" retailer. Much like Ralph Lauren (whose style is frequently evoked in Abercrombie & Fitch�s apparel), the clothing is fairly predictable and is generally immune to trends: woven shirts, denim, miniskirts, cargo shorts, wool sweaters, polo shirts, and t-shirts can be found in most collections. Labels on clothing reinforce the company�s image of as a casual luxury merchandiser and emphasize the quality and durability of the product. The store quickly became successful, and by the mid-1990s, there were dozens of Abercrombie & Fitch stores in the United States. Careful marketing made the brand synonymous with wealth and status among young patrons. In 1996, The Limited took Abercrombie & Fitch public on the New York Stock Exchange and gradually phased out its ownership of the company.

The original store concept (referred to as the "chain store" concept) hearkened back to the outdoorsy image of company's early years. The store resembled a hunting lodge, with plaid carpeting, dark wood fixtures, and antler chandeliers. However, the company introduced a new store concept (referred to as the "canoe store" concept) in the late 1990s to accommodate its rapid growth. The canoe store is recognized by a white facade, navy blue awnings, and solid metal and glass doors. The interior features gray walls, white molding, polished concrete and black wood floors, metal fixtures, and large pictures of scantily-clad models. A moose head and canoe are mounted in the main room of each canoe store. Unlike the chain store, which typically has a wider storefront and two entrances, the canoe store has one main entrance and is walled off into at least five rooms. The company is in the process of converting all of its chain store concepts into canoe stores.

Abercrombie & Fitch has complete control over the design and production of its merchandise, stores, and marketing. Because it spends little on external advertising, the company depends upon the store experience to help define the brand. The company strictly regulates the store environment in an effort to provide a consistent, pleasureful experience for customers in a manner that can be replicated in each store. Factors such as visual presentation, music, and fragrance are not left to chance. The company also specifies in painstaking detail how lighting, layout, visual displays, marketing, and fixtures are to be placed and used in every store. Each store is spritzed daily with men�s cologne in order to ensure a pleasant sensory experience. Every store plays the same pre-produced music segment for a period of four to five weeks and has instructions on how loud the music is to be played at certain times of the day or week. Abercrombie & Fitch has become notorious for loud, pulsing dance music, often eliciting complaints from mall operators and tenants for disrupting other customers and stores.

Merchandising is managed in a similar fashion. Every week, each store is sent a booklet—often over 100 pages long—detailing the exact specifications for placing merchandise on the sale floor. Older merchandise is shuffled around to provide a different presentation for frequent customers each time they enter the store, while new items are generally placed out in the front rooms for display. Apparel is laid out so that customers can feel the fabrics, contributing to the sensory experience offered in-store.

The company manages merchandising, distribution, and sales by assigning each store a tier level (1, 2, 3, 4, or 5) and a volume level (A, B, C, D, E, or F). Tier level determines what selection of the current clothing line is sent to a store. Tier 1 stores receive all of the current items in all styles and colors, for example, while lower tier stores are sent less merchandise in a smaller range of sizes and colors. A store's tier level is independent of its volume, since allocation is often dependent on available area of selling space. Some small stores are relatively high volume, but lack the floor space needed to support the entire line. A store can have different tier designations for its men's and women's sides. (Women's retail normally outperforms men's by a ratio of about 2:1, though in certain markets the difference is greater or less.) The company designates Volume A stores, usually in major cities and tourist destinations, as "elite" or "super-elite." There are three super elite (AA) stores (Ala Moana in Hawaii, Aventura in Florida, and South Street Seaport in New York City) and less than thirty elite (A) stores in the chain.

The company has opted to build only large stores, averaging 8,000 � 20,000 square feet (700 to 2,000 m²) in high-volume retail centers around the country. Throughout the 1990s, Abercrombie & Fitch enjoyed sales of over $400/ft² ($4300/m²) —high by retail standards—but that number has dropped significantly in recent years. As of 2003, sales were $345/ft² ($3700/m²). The rapid expansion of the chain from 1999-2003, in addition to the introduction of the company�s more moderately-priced concept Hollister Co., arguably contributed to a decrease in same-store sales (an important measure of retail performance) across the chain during that time period. In order to fend off what analysts often called the "cannibalizing" effect that Hollister is having on the flagship chain, Abercrombie & Fitch has attempted to differentiate itself from its sister brand by raising price-points, introducing a line of higher-end merchandise called "Ezra Fitch," and establishing strategies to limit the intrusion of Hollister into key Abercrombie & Fitch markets. Such efforts appear to be working: Abercrombie & Fitch experienced a 16% increase in same-store sales in early 2005.

Lifestyle brand

Abercrombie & Fitch aggressively positions itself as a "lifestyle brand"—a brand that embodies the values and appeal of a desirable way of living. The stores are plastered with photos of physically attractive young models, blast loud dance music though powerful speakers, and smell of the company's signature cologne. The stores are also staffed with attractive "brand representatives," young salespeople who embody the Abercrombie & Fitch lifestyle: attractive, athletic, popular, enthusiastic, and outgoing. For years, brand representatives were required to wear only Abercrombie & Fitch clothing, but such regulations have been loosened following lawsuits.

The most conspicuous of the company's lifestyle branding efforts was its now-defunct magazine. Abercrombie & Fitch began to sell a quarterly publication, a hybrid magazine and catalog (company officials referred to it as a "magalog."), in the early 1990s. The quarterly featured advice columns, articles about college life, and—most famously—the highly sexual fine art photography of Bruce Weber, well-known for his erotic male artwork. The racy publication made a splash with young customers and had one of the highest circulation rates among young adults of any magazine in the late 1990s. Weber's homoerotic photography also made Abercrombie & Fitch a destination for the fickle gay market. The brand's male clothing has often been characterized by its loyal gay following, though the company denies that it ever made a concerted effort to market to gay customers.

Controversy

The �A&F Quarterly� quickly became a lightning rod of controversy. Despite a company policy that restricted sales to adults, critics charged that the publication was corrupting consumers, many of whom were minors. A growing opposition argued that the magazine contained little more than pornography, citing images and articles that depicted and glamorized alcohol, (false allegations of) full frontal nudity, and group sex. In 2003, an array of religious organizations, women's rights activists, and Asian-American groups organized boycotts and protests to admonish the company for the publication, forcing the removal of the �Christmas Edition� from stores. In 2004, �A&F Magazine,� a comparatively tame collection of photos and essays about rising celebrities, replaced the much debated publication altogether.

Under increased scrutiny, complaints grew to include objectionable Abercrombie & Fitch product offerings. In one case, outraged parents mounted nationwide storefront protests of thong underwear designed for 10-14 year old customers, forcing the Abercrombie division to recall the line. More controversy erupted over shirts featuring racist caricatures of Asians and other ethnic groups. One such shirt featured the slogan "Wong Brothers Laundry Service—Two Wongs Can Make It White" with smiling figures in conical hats, a 1900's popular-culture depiction of Chinese men. The company discontinued the designs and apologized. Similar controversy erupted in 2004 over a shirt featuring the phrase, "It's All Relative in West Virginia." West Virginia governor Bob Wise lashed out at the company for depicting "an unfounded, negative stereotype of West Virginia."

A 2004 lawsuit — Gonzales v. Abercrombie & Fitch — accused the company of discriminating against minority employees by offering desirable positions to white employees. The company agreed to an out of court settlement of the class action suit. As part of the settlement terms, A&F agreed to pay $40 million to rejected applicants and affected employees, institute policies and programs that promote diversity in its workforce and advertising campaigns, appoint a Vice President of Diversity, hire 25 recruiters to seek minority employees, and discontinue the practice of recruiting employees at primarily white fraternities and sororities.

Other brands & additional information

Abercrombie & Fitch operates three additional concept stores: abercrombie, a smaller version of the original chain which aims to attract patrons ages 7-14; Hollister Co., which sells California-inspired apparel to attract patrons 14-18; and RUEHL, which sells business casual and leather goods to target ages 22-30. The company has expressed interest in developing a fifth concept, though there are no confirmed plans to introduce another brand to the market in the near future. As the Abercrombie & Fitch brand reaches its full growth potential in the U.S., the company is depending on the Hollister Co. and RUEHL concepts to act as its primary growth vehicles in the U.S. The company will also begin expanding the brands internationally: it has announced plans to open 5 Abercrombie & Fitch and Hollister stores in Toronto and Edmonton in 2005, and stores in Europe by 2006, with the first store rumoured to open in Dublin, Ireland, and stores in Japan by 2007. The chain briefly operated in Canada via its relationship with department store Woodwards in a few select locations across the country in the late 1980s. The chain did not do well as expected, however, and was folded after only a few years of activity.

In 2003, the company expanded its Columbus, Ohio headquarters. Set amid acres of forest, the compound features rustic, farm-styled structures with elements of modern architecture, a reflection of the company's outdoorsy roots. The campus includes a mess hall, fire pits, trails, a recreational center, and an Abercrombie & Fitch store, where marketing and design elements are developed. The interior design bears a likeness to the stores, furnished with dark wood and concrete floors, leather couches, and comfortably-worn rugs.

Abercrombie stores in the New York City-Philadelphia metropolitan areas, Florida, Hawaii, and Southern California have the highest sales performance, while sales are lowest in the Midwest region. However, New Hampshire has more Abercrombie stores per capita than any other state.

Ownership

• Chairman & CEO — Michael Jeffries, 60
• President, COO, Interim CFO, & Director — Robert S. Singer, 53
• Director of Investor Relations of Corp. Communications; Mr. Thomas D. Lennox
• Exec. VP of Sourcing; Ms. Diane Chang , 49
• Sr. VP of Stores; Mr. David L. Leino , 41

External links

• Official website (http://www.abercrombie.com/)
• Official youth website (http://www.abercrombiekids.com/)
• Official Hollister Co. Subsidiary brand website (http://www.hollisterco.com/)
• Official A&F group (http://groups.msn.com/TheAbercrombieLookBookOnline/aflbo.msnw/)

References

—. "National Clothing Retailer Must Pay For Discrimination, The Defender, Winter 2005, 1. A publication of the NAACP LDF. Description of the settlement of Gonzales.

—. "West Virginia governor seeks halt of Abercrombie T-shirts," USA Today, 23 March 2004.

Grauer, Neil A. "Remembering Papa." Cigar Aficionado, July/August 1999.

Gross, Daniel. "Abercrombie & Fitch's Blue Christmas." Slate, 8 December 2003.zh:亞伯克朗比及費區