Overview
Abercrombie & Fitch Co (A&F Co) is a global omnichannel fashion retailer with three distinct brands under its banner. Largest and most well-known is its eponymous label Abercrombie & Fitch which also hosts Abercrombie Kids, activewear and loungewear brand Gilly Hicks, and “laidback California lifestyle” brand Hollister, which hosts sub-brand Social Tourist.
The retailer operates over 750 stores under these brands worldwide, with key regions across North America, Europe, Asia and the Middle East.
Chief executive Fran Hororitz has been leading a turnaround of the business since 2017.
Under her leadership, A&F Co saw its most recent sales surge 15.8% to $4,281m (£3,433m) in the 53-week year ending 3 February 2024 (FY2023).
‘Always Forward’ plan
A&F Co launched its ‘Always Forward’ strategy in June 2022.
Horowitz stated: “Today, we have clearly defined positioning at each of our global brands with unique edit points, a smaller, modernised and more profitable omni-enabled store base, digital penetration and meaningful cash generation. Our company and brands are purpose-led, and listening to and learning from our global customer is deeply ingrained in our thinking and culture in a way that it never has been before. We are committed to constantly adapting to meet and exceed their ever-changing needs, and I firmly believe that the changes we have made position us to deliver steady growth.”
The retailer announced an annual revenue target of $4,100m (£3,300m) to $4,300m (£3,500m) and a sustainable annual operating margin rate at or above 8% by the end of 2025.
Longer-term, A&F Co is targeting revenues of £5,000m (£4,100m) and a “sustainable” operating margin rate at or above 10%.
‘Always Forward’ is anchored on three strategic growth principles, which align to the retailer’s purpose of “Being here for you on the journey to being and becoming who you are”.
These principles are to:
- Execute focused brand growth plans
- Accelerate an enterprise-wide “digital revolution”
- Operate with financial discipline
A&F Co set out the growth opportunities in its brands as follows:
- The Abercrombie & Fitch and Abercrombie Kids brands (targeting 6% to 8% sales CAGR over the three years to FY2025)
- The Hollister brand (targeting a flat to 2% sales CAGR over the three years ending to FY2025)
- The Gilly Hicks brand (targeting a 15% sales CAGR over the three years ending to FY2025)
A&F Co plans to expand and accelerate its investment “in best-in-class customer analytics and proactively build teams and systems to continue to meet and exceed customer expectations”.
Expanding kidswear offer through new distribution deal
A&F Co announced a new partnership with Haddad Brands in August 2024 to expands its kids brands globally, focusing on new distribution channels.
Horowitz commented “As we work to diversify A&F Co.’s channel mix and drive sustainable, profitable growth, we are thrilled to partner with Haddad Brands to build on our success and create an opportunity to grow the brand in the years ahead by engaging with new customers globally.”
“Digital revolution”
Horowitz revealed online sales for the group were around 44% of total revenues in 2022. This was despite around two-thirds of Hollister customers shopping in-store during the year, with teen customers favouring “the in-store experience”.
She commented: “Our customer journeys are different and ever evolving, necessitating a robust set of tools and technologies. Our team has been hard at work modernising our technology foundation. A focus area in 2022 was evolving our data infrastructure to enable faster, more predictive insights, which will largely conclude in 2023.”
Abercrombie & Fitch chief digital and technology officer Samir Desai revealed at National Retail Federation (NRF) in 2024 that between 70% to 80% of its customers are members of its loyalty programme. This, he said, means “you get to learn a lot more about the customer journey that you wouldn’t learn in a bricks-and-mortar experience”.
The retailer is harnessing the power of artificial intelligence (AI) on several initiatives including:
- Personalised recommendations
- Demand forecasting in stores based on weather and post-code
- An AI stylist feature which launched in 2023 on its app - customers can find a product based on questions and prompts rather than keywords
It has also been focusing on moving its data into the cloud in recent years, having worked with Oracle since 2008 when it transformed its merchandising, planning and supply chain systems.
In 2023 it worked with Deloitte and Oracle to deploy its Merchandise Foundation Cloud Service.
UK market growing
The UK market represents nearly 6% of group revenues.
Having retrenched during the pandemic, with store numbers falling from 36 to 22 in FY2021, A&F Co looks to be expanding in the market once more. It opened the doors of a new Abercrombie & Fitch store in Carnaby Street, London, in December 2023, measuring 3,000 sq ft. This followed the launch of its store in Battersea Power Station in October the same year.
The retailer announced plans to open a new Abercrombie & Fitch store in London from early 2025. The store will span two floors, positioned on the corner of Oxford Street and Bond Street.
Same-day delivery
Building its UK fulfilment capability, the group expanded its same-day delivery option to the UK market in June 2022, having launched it Stateside in 2021.
Available across all its brands apps and websites, a ‘Get It Fast’ filter allows customers to find items that are available for the service or choose the same-day delivery option (for available items) at checkout.
The retailer partnered with Stuart, Gophr, and software provider Delivery Solutions on the implementation.
It commented: “Same-day delivery supports our goals of meeting our customers where they are and delivering our product when and how they want it. The additional speed offering has been resonating with customers in the US, especially those in high-density markets, since we launched last fall. This gave us the confidence to expand the offering to our customers in the UK, who we know are looking for more choices and faster delivery options.”
