Abercrombie removed its shirtless models and turned up the lights in stores, leading to the biggest retail comeback of the year

AbercrombieBusiness Insider/Mary Hanbury

  • Abercrombie & Fitch's shares soared 25% last month after the company reported its fifth consecutive quarter of positive same-store sales growth.
  • Abercrombie & Fitch, which also owns Hollister and Abercrombie Kids, has been working to execute a turnaround at its namesake brand by investing in its stores, closing unprofitable locations, improving product assortment, and shaking off its '90s brand image.
  • Business Insider has crowned the company retail's biggest comeback of 2018.

Abercrombie's comeback has been almost four years in the making, but it finally came to fruition in 2018.

As a result, the teen-turned-millennial-focused brand, which counts Hollister and Abercrombie Kids as its sister brands, has been crowned Business Insider's biggest comeback in retail this year.

Last month, its parent company reported its fifth consecutive quarter of positive same-store sales growth; the Abercrombie brand alone had its fourth consecutive quarter of positive same-store sales growth.

At the time, analysts praised the company for being on the steady road to recovery. The company's stock soared as much as 25% shortly after it reported earnings.

Read more: Abercrombie came back from the dead by getting rid of its shirtless models and dark stores. Here's what else has changed for the retailer.

"The recovery at Abercrombie & Fitch is still a work in progress. However, turning around a once very troubled brand is far from easy," Neil Saunders, managing director of GlobalData Retail, wrote in a note to clients at the time.

He continued: "Progress and advancement do not all come at once; this is a step-by-step process that will build over time. We are satisfied that management is on the right road to recovery."

What's changed?

CEO Fran Horowitz has been leading a turnaround effort since she took the helm in February 2017. She has invested in stores, closed unprofitable locations, improved product assortment, and worked hard to change the perception of the brand with new marketing.

"We are not the Abercrombie & Fitch that you once knew," Horowitz said to an audience at the New York Stock Exchange during the company's investor day in April.

Since 2014, the brand has made some dramatic changes to its stores by removing the dark shutters to bring in light, getting rid of the shirtless models that lingered outside, and ditching the racy shopping bags.

The Abercrombie of today is a toned-down version of its former self. The stores are lighter and brighter, the thick smell of cologne in the air is no more, and oversexualized ads have been replaced by wholesome, outdoorsy images.

And it seems to be working. According to data put together by market-research firm YouGov, US adults aged 18 to 34 have a better impression of Abercrombie & Fitch now than they did back in 2016.

Abercrombie & Fitch's customer impression score has climbed from -4 in early 2016 to 3 this November, meaning that more young consumers have an overall positive impression of the brand, as opposed to negative.

AbercrombieAbercrombie

Abercrombie is also dressing up the product assortment to appeal to an older customer. It wants to target the 18-to-24-year-old shopper, someone who is transitioning from college to their first job and beginning their first adventure, Horowitz said in a recent phone interview with Business Insider.

And experts say it's working.

"In our view, the range - especially at Abercrombie - is now more sophisticated, is more on-trend, and better reflects what modern consumers want," Saunders wrote last month.

In the past year, it has made a bigger push to be seen as a more desirable and trendy brand to appeal to these consumers. Earlier this year, it announced a partnership with hotel and lifestyle chain sbe, which operates businesses in Los Angeles, Miami, and New York, to offer pop-up Abercrombie shops at some of its hotels.

"We plan to make further marketing investments in experiences: communicating with our target customer through the right channels and creating authentic, customer-inspired events," a spokesperson for Abercrombie & Fitch told Business Insider at the time.

Less is more

While some stores have had the lights turned up, for others, it's lights out. The company has trimmed its store fleet substantially since 2010, closing 450 stores across all brands. A spokesperson for Abercrombie told Business Insider that two-thirds of those closings were Abercrombie and Abercrombie Kids stores. It plans to close 40 more stores by the end of the year.

It has downsized other stores and since 2017 opened 16 new prototype stores that have more of a boutique feel, with curated collections of clothing and luxurious fitting rooms with seating areas and charging stations.

The new, smaller locations, are proving to be effective for the brand.

"We don't need that level of space," Horowitz told Business Insider in June, referring to the former large stores. "The new stores are more shoppable - we've turned on lights and made it easier to shop for product and house product."

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