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abercrombie & fitch financial analysis
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Being an upscale industry, Abercrombie and Fitch would appear to be a successful corporation. Although the company was once successful for a number of years, it’s apparent that there has been a significant decline in its overall appeal and how much revenue the company acquires each year. With just over 1,000 retail stores in the U.S., Canada, and Europe, Abercrombie and Fitch has thrived to be one of the most avid corporate extensions.
While the company may be seeing the start to its decline, past years are proof that Abercrombie and Fitch have made a good name for themselves. How does the industry operate one might ask? There are many sides to the coin when it comes to determining how this company functions, but let’s start with its employees. Rumor has it that many of the company employees are hired strictly for their looks. To please consumers of its products, Abercrombie and Fitch seems to adorn itself with innovative styles and sex appeal. With young adult models and sensual perfumes, Abercrombie and Fitch pulls in its consumers by the dozen.
Abercrombie and Fitch has definitely seen better days. In a recent poll, A&F was considered “the worst recession brand” by Time Magazine. During this economic downfall, the A&F industry refused to lower their prices, resulting in a 30% loss of sales. Although the company still remains up and running, they have definitely been affected by the economic recession.
The Abercrombie and Fitch industry mainly has mall-based stores, but in addition, consumers can buy their products online or through catalog orders. Although there is an obvious decline in sales, and the U.S. is currently undergoing a drastic recession, Abercrombie and Fitch has began expanding their retail stores in other ...
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...Company Financial Statements (ANF): Annual Income Statement - MSN Money ." Money: Personal finance & investing news & advice - MSN Money. N.p., n.d. Web. 2 May 2011.
"American Eagle Outfitters Incorporated - Company Financial Statements (AEO): Annual Balance Sheet - MSN Money ." Money: Personal finance & investing news & advice - MSN Money. N.p., n.d. Web. 2 May 2011.
"ABERCROMBIE & FITCH CO-CL A (ANF:US): Financial Statements - BusinessWeek." Investing & Stock Research by Company and Industry - BusinessWeek. N.p., n.d. Web. 2 May 2011. .
Abercrombie and Fitch is an American retailer who has been facing many outstanding issues and is at risk of disappearing. For the past two decades, the company has been facing severe controversy. Abercrombie and Fitch has been long criticized for lack diversity and inclusion. The company excludes minorities and plus-sized customers from its stores. This controversy has brought many financial problems to Abercrombie and Fitch.
American Eagle Outfitters is a fairly new company but they are doing extremely well because they have a clear grasp of who their target market is. They posses a fresh new hip look with great quality clothing at a reasonable price for consumers (http://www.prism.gatech.edu/~gte201w/aeostrat.html). This is one of the main reasons why teenagers and young adults are so attracted to the company. American Eagle is aiming to appeal not only to the targeted 20 year old but also consumers between the ages of 16 and 34 years old. This will widen the gap between their major competitors because they are trying to appeal to more segments than just one. American Eagle seeks to be assessable, fashion orientated, and has a strong value proposition, which has allowed the company to thrive and take shares from competitors over the past five years. Not only is their clothing line very comfortable, bold and fresh, the store layout and atmosphere is also major key factors in American Eagle’s success over the recent years. AE also has a strong competitive advantage because of their short lead times and their ability to position themselves in high-visibility, high-profile locations in key markets. American Eagle’s cycle time is about five months from design to delivery, versus about nine months for The Gap and six months for Abercrombie. AEOS minimizes lead times by maintaining sourcing relationships with a few key manufacturers and producing much of the merchandise in North America, versus 9% for The Gap and a minimal amount for Abercrombie. AEOS has the ability to quick-source some of its simpler product categories in order to react quickly to sales trends. (http...
Since the 1970’s Urban Outfitters INC. has produced a wide selection of clothing brands for the younger generation. Urban Outfitters INC. includes Free People, BHLDN, Anthropologie, Terrain and Urban Outfitters. The beginning of Urban Outfitters INC. started out in Philadelphia for college students, their fun loving affordable clothing appealed to students who were living under a college budget. It’s known for its “hipster” and “free thinking” clothing that would appeal to the younger generation. However in present day it seems as if the original purpose of Urban Outfitters INC. has been lost. The prices of clothing at Urban Outfitters and at their sister stores has increased drastically to where college students can barely afford it. Throughout the recent years Urban Outfitters INC. has found itself in multiple issues that effects the sales of their stores. For instance being reprimanded for their designs, being sued for stolen designs and having a president who supports anti-gay polictians. Considering all the negative aspects to Urban Outfitters and the loss of their traditional purpose Americans should not support Urban Outfitters Inc.
In December 2003, Abercrombie and Fitch decided to stop issuing its quarterly magazine, which it had published in addition to its catalogs since 1997. In a statement issued at the time of the recall, Abercrombie said, "While it has enjoyed success with the Quarterly over the years, the company believes it is time for new thinking and looks forward to unveiling an innovative and exciting campaign in the spring." "We just felt it was time to retire it and come back with something that has beautiful imagery and classical photos," said Hampton Carney, company spokesman, in the Times. "... But that doesn't mean they're going to go totally conservative and lose their nerve. According to CNN.com, Abercrombie said that the recall of the magazine was due to the need for counter space for a perfume, but opponents of the catalog are saying that it was in response to protests against its racy content, such as nude models and articles about sex. Criticism is not new to Abercrombie's marketing strategies; groups such as the National Coalition for the Protection of Children and Families, the American Decency Association, and the Focus on the Family organization have protested against its sexual content for several years, according to the New York Times.
"Portions of Our Annual Report to Shareholders." U.S. Securities and Exchange Commission, 31 Jan. 2011. Web. 12 Oct. 2011. .
Macys has become one of the greatest retail stores in the United States. Since they first opened their doors to customers in 1858 Macy’s stores have always been grand and innovative. They have changed their stores quite remarkably since it’s beginning. Macy’s elegant charm has brought in customers and help turn this retail store into a huge company. Currently Macys has 850 department stores in 45 states. Most Macy’s stores are quite grand and have two to three levels in which they market to youth, women, men. Macys selling strategy also has grown to have great experience in pulling in customers. From sales to advertising Macys is a big fashion competitor.
O'Keefe, Benjamin. "Petitioned Abercrombie & Fitch." Change.org (n.d.): n. pag. Nov. 2013. Web. 05 Apr. 2014. .
Fast Fashion may be the most significant disruptive in the retail industry today. Troublesome novelties, or product or services, that alter an prevailing market by presenting minimalism, suitability, convenience and affordability, have the most positive influence on a company. Because fashion is ever changing and technology is always evolving the amount of production time it takes for something to be manufactured
But Uniqlo is not content with their success in the late 1990s of the last century, Uniqlo to adjust th...
The period success of GAP had taken a turn since 2002. Profits and revenue continued to decline. From 2008-2010, just in U.S, 6000 retail stores had been closed because of the financial recession; during this period, Gap closed more than fifty of its 3251 stores. The annual income of GAP had also been successively overpassed by ZARA in 2008 and H&M in 2009, which dropped down to the third in fashion industry (Liu, 2013). And continually, the company’s net income declined to $833 million in 2011, which is 17% less than it earned in 2010 (Exhibit 1) (Ciasullo, Blauvelt, & Lambert, 2012). In U.S, the largest market for GAP, the elder generation who bought Gap products in 1990s had gradually left Gap for different requirements with the increasing age, and Gap was unable to keep its success with the younger generation. In addition, although Chinese market currently has been the second largest market for GAP Inc., they still operate the GAP brand as a follower without any distinct positioning str...
Fashion is an outlet people use to express themselves. People anxiously wait to see what the next trends are as seasons pass by. We buy anything that doesn’t break a bank, people buy a $10 shirt just because it’s cheap and they might not even wear it, but it’s all right, since it wasn’t expensive. As harmless and normal as that scenario sounds, the fashion industry has created the harmful concept that is “fast fashion”, in which stores sell an abundance of extremely cheap trendy clothing and “where deliveries are small and often, with stock delivered twice a week, for instant-access fashion.” (Cochrane)
Nordstrom’s product offerings are not only of the best quality available, but are also presented in a fashion appealing to customers. The reputation Nordstrom has built in the industry has sustained their success for over a century. Nordstrom’s further expects to enhance their company philosophy in the future by implementing additional differentiation tactics that will continue their market dominance in highly volatile economy.
The fashion apparel industry has significantly evolved, particularly within the last 20 years. The changing dynamics of the fashion industry have forced retailers to desire low cost and flexibility in design, quality, and speed to market, key strategies to maintain a profitable position in the increasingly demanding market.
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
...d try attracting slow fashion consumers instead and cater toward their needs. Apparel retailers need to start being more sustainable, cautious and consider the lifecycle of their products. Managers of the fashion industry must also change their marketing strategies to not focus on who has the lowest price anymore. Other marketing strategies may be giving a percentage off on purchase for bringing in old clothing to recycle, or starting with campaigns to educate fast fashion consumers to start being more environmentally conscious and encourage them to reduce the amount they purchase, reuse their clothes for a longer time period, and recycle clothes they no longer want to use. Fashion retailers may want to consider promoting quality over quantity as well as offer versatile product lines that allow consumers to mix and match pieces throughout the seasons (Zarley, 2010).