Abercrombie & Fitch

Nikki Fink MAT 114 Section 001 September 19, 2006

Fink 2 Abercrombie and Fitch Abercrombie and Fitch is a well known apparel retailing company. They specialize in “upscale men’s, women’s, and kid’s casual wear” (Company Profile). Although their retailing mission statement could not be found, they do make it know that they welcome diversity. Their Diversity Mission Statement can be found on their annual report: “At Abercrombie and Fitch we are committed to increasing and leveraging the diversity of our associates and management across the organization. We support those differences through a culture of inclusion, so that we understand our customers, enhance organizational effectiveness, capitalize on the talents of our workforce and represent the communities in which we do business.” Males and females between the ages of 18 and 22 are Abercrombie’s target market. The products they offer include items in the apparel, personal care, and accessories categories. The main strategy Abercrombie uses to sell its products is through maintaining a young, hip image, often achieved through hot photographs in advertisements and around their stores. Also, Abercrombie and Fitch aims to maintain a uniform appearance through out all of its stores. Although Abercrombie and Fitch is a popular, successful company, they still must make sure they are keeping up with the game in the retail world. It is important for all companies to analyze the way they are doing business and compare it with their competitors. Listing a company’s strengths, weaknesses, opportunities, and threats will help them make smart business decisions in the future. Because Abercrombie is already a well established company they have many strengths. One strength is revenue growth of 2.5% in 2004. Another strength Abercrombie and Fitch has is its brand definition. Because of their high prices,

Fink 3 Abercrombie is able to put fine details into their clothes that their competitors can not. Also, they can charge higher prices because they are so well known, which is also a strength of the company. Another unique characteristic about the company is the in-store experience. Hip music and well dressed employees can attract more customers simply because shopping is more enjoyable. The infamous pictures that Abercrombie uses in its advertisements and in-store displays can also be counted as a strength. It uses modern culture as a way to attracted more customers. Although it can bee seen as a strength, the half dressed models in Abercrombie’s ads can also be seen as a weakness. Customers may either be offended or left with low self esteem by the pictures, causing them not to shop in their stores. Their high prices can be seen as a major weakness. Many people are willing to forgo detail Abercrombie provides in their products for cheaper, similar items from competitors. According to their company profile, having a single distribution center is also a weakness for Abercrombie. If something were to happen to this location, shipping inventory would become slow and inefficient. Because of Abercrombie’s high profile they have many opportunities. One major opportunity is to go global. Right now Abercrombie only has store locations in the U.S., therefore there are many other countries they could establish a presence in. Abercrombie has also already taken advantage of some opportunities to open to a broader range of customers. They now have a company for kids and also one for younger high school students. They also have the opportunity to increase their denim collection due to the rising demand for denim.

Fink 4 There are a couple main threats that Abercrombie and Fitch need to look out for. The major threat to the company is a shift in consumer demands. It is very possible that people will no longer be willing to pay the prices of Abercrombie and chose to take their businesses elsewhere. They also need to look out for competitors such as American Eagle who are leaning towards the wear-now selections of clothing. Also Abercrombie has had a past of sales increasing mainly during the Christmas holiday. That’s one area they need to watch out for. Overall, I believe Abercrombie has a good business strategy. They have set themselves apart from many of their competitors and are focused on delivering products true to their brand. The main aspect I think Abercrombie has gotten right is their marketing strategy. Although I do not necessarily agree with the photos of half naked models hanging in their windows, I believe it has been a successful way of getting customers in the door. If nothing else it creates a sense of curiosity. All businesses leave room for improvement. There are a couple aspects I believe Abercrombie could work on. First of all I think more people would shop at Abercrombie if they could find a way to lower their prices. This may lower their marginal revenue but it would also increase their volume of customers. Another suggestion I would have for Abercrombie and Fitch is to open another distribution center. This will help speed up inventory shipment and perhaps make the process more efficient. One way Abercrombie could stay on top of their competition is to follow in American Eagles steps of a more wear-now line of clothing. One last suggestion for Abercrombie and Fitch for ways to improve their performance is to work towards going global. After opening up more distribution centers in the U.S., work on establishing a presence in other countries.

Fink 5 References Abercrombie & Fitch (n.d.). Abercrombie & Fitch. Retrieved September 18, 2006 from , Web site: http://www.abercrombie.com/anf/lifestyles/html/homepage.html Dunne, P.M., & Lusch R. (2005). Retailing (5th ed.). United States: Thomson. Riper, T.V. (2006, August 31). The eagle has landed. Retrieved September 18, 2006 from , Forbes Web site: https://elearning.uky.edu/webaaps/portal/frameset.jsp?tab=courses&url=/bin/ common/course.pl?course_id=_2848_1 University of Kentucky (2005, June). Abercrombie & Fitch Company Profile. Retrieved September 18, 2006 from Datamonitor Company Profiles Authority Web site: http://web.ebscohost.com.ezproxy.uky.edu/ehost/detial?vid=23&hid=106&sid=7c 1d96a3-14be-421b-9b5b-37b19f071235%40sessionmgr103 Vault (n.d.). Abercrombie & Fitch . Retrieved September 18, 2006 from , Web site: http://www.vault.com/companies/company_main.jsp?co_page=12&product_id=2 2890&ch_id=318