Abercrombie & Fitch Case Analysis
Abercrombie & Fitch (A&F) is an American was founded in 1892 by David T and the first store was located on Water Street in lower Manhattan. At that time, A&F was originally and outdoorsmen store, a few presidents and famous explorers purchased. Nowadays, A&F become one of the most popular clothing for youth which age of 18-22 year old people, especially for the college students. The company catered four brands thought different life stages – from elementary school to post-college. The A& F co. retailer managed four brands, which are A&F, Abercrombie kids, Hollister Company, and Ruehl, but the Ruehl is closed in early 2010. Through my writing, A&F’s internal strengths, weaknesses, and external opportunities, threats will be analyzed. I will also talk about the mistakes and successes since the time that A&F was founded to 2005. What’s more, the major problems or challenges will be pointed out, and some of my personal alternatives and recommendations will be given aiming to Abercrombie & Fitch’s shortcoming and main problem. Personally, the major problem of A&F is how to maintain a competitive advantage over new entrants into the market, as well its current main competitors: Gap Inc., American Eagle outfitters Inc. (AEOS), and J.Crew Group, Inc. (JC) ? SWOT analysis
First of all, I will talk about A&F’s strengths and weaknesses, which are focus on the internal of the company. * Strengths:
1. Provide special shopping experience to customers.
The value of A&F retailer held is sensuality, a youthful lifestyle, a love for the outdoors and fun with friends. The entire store symbolized that value, and what’s more, loud music, sexy model, and perfumed interiors also encouraged teenagers to hang out with their friends. 2. Has continually made profit.
According to exhibit 1 in page 355, we can see that A&F has continually made profit since 2002 to 2005; the following table shows the net income in millions of dollars:
3. Recognizable brand name.
i. A&F’s materials are in high-grade cotton, rather than using other material by pursuing the fashion. This way is not only good for mass production while ensure the quality of the products, but also reduce the cost of raw materials for other expensive materials. ii. In order to keep the fashion of market, which are teenagers, A&F hire college student design team. It not only reduces design cost, but also can design products that easier stratify the need of the target customer. iii. A&F has regular discount quarterly, but its principle is never discount on the classic products. It is good for clearing the inventory cost. At the same time, it will not cheapen its brand. 4. Built brand image.
It is very important to build a high-end overall brand image. In this aspect, A&F did very good through products’ material, detail, and design. For example, all its products’ logo is not printed, but the embroidered patch. And A&F’s products’ style is changing the entire series to the tight fitting type. For men, it has “muscle” series. It means that only the standard body is eligible to wear A&F, which is the most different places among other brands. * Weaknesses:
1. Employees not Fairly Treated
When entering an A&F store, we can notice that all the salespersons are wearing A&F’s products. They are also a kind of display. However, some problems are happening because of that. Some employee complaints that they are forced to buy and wear the company’s clothes on the job. What is more, one woman claimed that she spent more money on clothes for work than her salary. some of employee also accused the company failing to pay overtime salary when they were required to work 50-60 hours per week. 2. Has not created culturally diverse atmosphere
In June 2003, A&F was accused hire “overwhelmingly white workforces”. A student from...
Please join StudyMode to read the full document