Article written by Angela Hydes, Marketing and Content Contributor. Follow us at @TALGroup.
After announcing disappointing results from its second-quarter, controversial retailer Abercrombie & Fitch has decided to pull the plug on its recognizable branding. By Spring 2015, the company’s logo will be completely eliminated from its attire in its U.S. stores. Crazy to think that this once-mighty company was a champion of the logo-era of the late 2000s. How the high mighty have fallen.
On Thursday, Abercrombie reported a 10% drop in sales at its Hollister brand last quarter as compared to the same period in 2013. Both brands are struggling to adapt to the present market, which favors attire that is far less branded. In contrast, Abercrombie (the flagship brand) noted a 1% dip in sales as compares to last quarter – a small change, considering the company saw its sales plummet 10% in 2013. [Huffington Post]
Revamping the Hollister Brand
Hollister unveiled its new store concept in November 2013. (Photo: Hollister analyst day presentation)
Earlier this year, the company announced its plans to aggressively revamp Hollister and turn it into a “fast-fashion” brand, taking styles from catwalks and bringing them to stores. This would allow them to compete more evenly with companies like H&M and Forever 21, which have become increasingly popular with teen and tween shoppers.
Change is coming slowly. In early 2014, Hollister began dumping its beach shack-inspired porch layout for shining glass. According to Abercrombie’s COO Jonathan Ramsden, the company is pleased with the remodeling thus far and plans to speed up the rollout in 2015. [Huffington Post]
Planned Store Closures
In this year alone, Abercrombie will be closing up 60 stores in the U.S. alone. Presently Hollister operates at around 600 stores, while the Abercrombie brand has half that number. As yet, the organization is still looking for a new executive to take the role of president at Hollister.
According to industry analysts, the Hollister revamp isn’t far off the mark. Analyst Simeon Siegal of Nomura Securities agrees that Abercrombie has managed to go from the “most hated” name of all among teen retailers to “loved”, as it cut costs and become more fashionable. Despite the drop in sales, the company’s stock is still up by 22% over the past year. According to analysts, a comeback is still very much possible – if executed carefully.
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