Abercrombie & Fitch Does About Face, Embraces Discounting
Abercrombie came out strongly against discounting early on, because executive were afraid it would damage the brand. Now Businessweekreports that Abercrombie is embracing the concept of huge discounts. There are clearance signs in store windows and discounts on jeans and outerwear by 30% to 40%. The retailer also plans to add lower-priced clothing at its Hollister stores.
But the problem goes beyond the sticker shock. Analysts like Lisa M. Walters, a principal at Retail Eye Partners, say Jeffries has also been a step behind fashion trends this year. "Fashion changed in the teen space," she says, shifting to more detailed, dressy items, "and they didn't change their fashions."
Jeffries, who declined to comment, is now taking action. Abercrombie has marked down items such as jeans and outerwear by 30% to 40%, trumpeting the discounts with e-mails to customers and clearance signs in store windows. "We are reacting to the current environment," he told investors in the Nov. 13 earnings call. Jeffries said he also plans to add lower-priced clothing, especially at Hollister, and has brought in trendier dresses and tops.
We did see the sale signs in an Abercrombie store a couple months ago but most recently it was a giant photograph of two shirtless guys and the word "fierce" - like in the graphic above. Abercrombie is probably going to need some discounts to regain some of the teen customers they have lost during the recession. The Abercrombie website does not currently mention sales or discounts. It's Hollister website doesn't mention any deals either.
