The Edmond Sun

Business

August 27, 2012

Abercrombie sales slide as half-naked models underwhelm

NEW YORK — Abercrombie & Fitch Co.'s soft-porn ads and nightclub vibe once delighted American teenagers and infuriated parents. Today, many aren't even paying attention.

The once-edgy brand has lost a third of its market value in the past year and is grappling with falling store sales in Europe and the United States. While the retailer blames the economy for its woes, brand consultants say Abercrombie has failed to change with the times. Today's teens are underwhelmed by the half-naked models and blaring, dimly lit stores. And they're less inclined to wear Abercrombie's uniform of denim and graphic Ts.

Abercrombie must recapture its cool at home or risk undermining a six-year-old global expansion, said Allen Adamson, a managing director at brand consultancy Landor Associates.

"The trick for fashion brands is how to keep the core edgy and hot," said Adamson, who has worked with clients including PepsiCo Inc. and Procter & Gamble Co.

Abercrombie's U.S. revenue has slipped 2.5 percent this year and the retailer is bracing for same-store sales declines in the second half. The slide comes as rival American Eagle Outfitters , which carries lower-priced, more-wholesome styles, is boosting same-store performance. Falling sales prompted Abercrombie to shutter 71 U.S. stores in its most recent fiscal year.

Abercrombie is counting on growth overseas, where it opened 47 locations in its most recent fiscal year, and its styles remain fresh and popular with many teens. Still, international same-store sales plunged 26 percent in the second quarter. While Europe's economic woes played a part, some new stores stole sales from existing locations, according to the New Albany, Ohio-based company.

"There's no personality anymore," said Martin Lindstrom, author of "Buyology: Truth and Lies About Why We Buy." "The pipeline of coolness is disappearing and once it dries up, then they will dry up."

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Business
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