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Abercrombie & Fitch–aka, Cool-Kids-Only?

I've often wondered why Abercrombie & Fitch has done so well, what the motivation is behind its marketing machine. On doing a bit of research, I discovered a man behind the machine: CEO Mike Jeffries. Under Mike Jeffries' tutelage, Abercrombie & Fitch has flourished, with hundreds of stores, four brands and billions in revenues.

I’ve often wondered why Abercrombie & Fitch has done so well, what the motivation is behind its marketing machine. On doing a bit of research, I discovered a man behind the machine: CEO Mike Jeffries.

Under Mike Jeffries’ tutelage, Abercrombie & Fitch has flourished, with hundreds of stores, four brands and billions in revenues.

According to a Salon.com story:

The company struggled some in the post-9/11 period, when, unlike other slumping retailers, it refused to offer discounts or promotions. But A&F’s earnings have nonetheless increased for 52 straight quarters, excluding a one-time charge in 2004. “To me it’s the most amazing record that exists in U.S. retailing, period,” says A.G. Edwards analyst Robert Buchanan.

Do You Know What You're Worth?

As his A&F brand has reached iconic status, Jeffries has raised prices, only to find that the brand’s loyal fans will gladly pay whatever he asks. Total sales for November 2005 increased 34 percent over the year before, more than five times the gain made by A&F’s main competitor, American Eagle. And while many retailers struggled during the Christmas season, Abercrombie thrived — it scored year-over-year gains of 29 percent in December, compared to 1.5 percent for other specialty retail stores. …

For example, when I ask him how important sex and sexual attraction are in what he calls the “emotional experience” he creates for his customers, he says, “It’s almost everything. That’s why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don’t market to anyone other than that.”

As far as Jeffries is concerned, America’s unattractive, overweight or otherwise undesirable teens can shop elsewhere. “In every school there are the cool and popular kids, and then there are the not-so-cool kids,” he says. “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely. Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don’t alienate anybody, but you don’t excite anybody, either.”

Still, Abercrombie & Fitch and Mike Jeffries have faced their trials.

In 2004 the retailer settled a discrimination suit brought by women and minorities, who charged the company treated them unfairly.

In 2005, according to BusinessWeek,

the company quickly settled a shareholder suit by reducing Jeffries’ stratospheric pay package; among other things, it agreed to cut in half a $12 million bonus he would receive for staying on as CEO through 2008. The suit also drew attention to A&F’s cozy board. BusinessWeek has since learned of an undisclosed, though not illegal, transaction involving the director of the compensation committee and A&F. It’s not just questions of corporate governance that have some concerned, though. “Abercrombie’s biggest weakness is that it is all about Mike,” says A.G. Edwards & Sons analyst Robert Buchanan.

‘New Faces’

Abercrombie & Fitch’s Web site closely resembles the retail stores–sleek, sporting sex appeal to sell clothes. The “A&F New Faces” page hosts a video of an Abercrombie & Fitch greeter named Kris. He says his job doesn’t feel like work, and that he’s treated like a movie star. He landed the greeter job after some Abercrombie & Fitch employees followed him out of a mall and asked him to work as a greeter. The gig ultimately landed him a job as a model for A&F.

In touting its brands, Abercrombie uses distinct language. For the Abercrombie & Fitch Co. brand, which targets college students, the site says, “Idolized and revered across campus, the A&F customer is a confident, classically stylish individual.” Regarding the brand geared to 7-14-year-olds, the site reads, “The Abercrombie kids are popular and mischievous … everyone else in school wants to be like them.”

The Gorgeous, Popular Few

From a business standpoint, I tip my hat to Mike Jeffries, who–though he seems to be a micromanager–has blended his vision, drive and skill into a recipe for success. Abercrombie’s recruiting is effective, too: walk into a mall, and you might walk out with chances of being a model, hitting the big-time.

On a personal level, the marketing strategy doesn’t resonate with me. Clothes and retail jobs shouldn’t be about sex–especially not for younger crowds–and they shouldn’t be about exclusivity. Most teenagers and college students are looking for acceptance and places they feel welcomed. It seems walking into an Abercrombie store might be just about as welcoming as the A-list crowd in the film “Mean Girls.”

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Matt Schneider
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