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ABERCROMBIE AND FITCH
CASE STUDY


Table of Contents:

1.Company Background
2.Company Strategy
3.Financial analysis
4.SWOT Analysis
5.Five Forces Model of Competition
6.Competitors & Rivalry
7.Key Success Factors
8.Company Value Chain
9.Recommendations
10.Conclusion
11.References

Company Background:
Abercrombie and Fitch (ANF) is a specialized apparel store which focuses on high quality clothing, beauty products, and accessories. Abercrombie Co. was established in New York City on June 4th, 1892 by David Abercrombie as a small waterfront shop located in Manhattan. Eight years later one of the stores frequent customers, Ezra Finch, decided to leave his current job as a lawyer and buy a substantial stake in the company from Mr. Abercrombie. In 1904 the pair decided to finally add Mr. Finches surname to the company and reestablished their brand name as Abercrombie and Fitch Co., which has remained unchanged since.. The fast growing success led the company to adopt the motto “The Greatest Sporting Goods Store in the World”. During the 1950’s, A&F’s President Otis L. Guernsey, began a strategy of rapid nationwide expansion by stating "The Abercrombie & Fitch type does not care about the cost; he wants the finest quality," (Wikipedia). After overextending their financial position and a period of economic decline, A&F is forced to declare for bankruptcy in 1976 and was eventually bought by Oshman’s Sporting Goods Inc. in 1978. Ten years later, Oshman’s decided to sell A&F to The Limited. It is during its early years under the new management that Abercrombie and Fitch is able to re-establish itself in the market as an upscale youth retailer. In 1996, A&F is spun off into its own company and enters the New York Stock Exchange under the ticker ANF. In 1998, A&F launches its “Abercrombie” brand which is targeting children ages 7-16. Two years later A&F launched its Hollister brand, which is a laid back surf themed apparel line targeting teens age 14-18. (Thompson/Gamble) In 2006 Abercrombie began its first steps into international expansion with the opening of its first flagship location in London, England. Since then they have successfully opened flagship stores in Milan, (Italy)and Tokyo (Japan). The company took a financial hit during the recent global economic recession which caused them to shutdown a few store locations and discontinue their RUEHL No.925 brand. Since then A&F has made a strong recovery in the market and are now positioned to continue pushing their global expansion in the near future. (Wikipedia) Company Strategy

In 1982 Abercrombie Co. was formed with the goal of selling high quality sporting goods to an elite sector of the market. The company quickly grew and was successful achieving its goals with a customer base including multiple United States Presidents and other celebrities of the time. As the company progressed and expanded, the needs and interests of its customer base constantly evolved. A&F quickly realized that in order to survive it must adapt and change its strategies to stay in line with their target market. Today A&F currently employs a focused differentiation strategy, choosing to exert its efforts towards attracting the 35 million teenagers that currently reside in the United States. A&F’s unorthodox use of generating brand loyalty, unique approach to store layout/décor, and use of controversy generated through their advertising/employment practices have been the cornerstones to their success since spinning off from The Limited. (Thompson/Gamble) In today’s culture, Controversy is perceived as a scarlet letter that a company needs stay away from at all costs. A&F has not only submerged itself in recent controversial situations but they have also embraced that image and are harnessing that stigma it to help grow their brand. One of the larger controversies that A&F has generated recently could be classified as appearance discrimination....
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