On February 26, 2014, Abercrombie & Fitch Co. (NYSE: ANF) released its fourth quarter and full year results that reflected a GAAP net income of $66.1 million for the thirteen weeks ended February 1, 2014, compared to GAAP net income of $157.2 million for the fourteen weeks ended February 2, 2013.
In a financial news release published on February 26, Abercrombie & Fitch states that the gross profit rate for the full year was 62.6 percent—20 basis points higher than last year.
Although Abercrombie & Fitch’s Chief Executive Officer, Mike Jeffries, is quoted on its investor relations page, saying, “Twenty-thirteen was a challenging year, with sales and earnings falling well short of the objectives we set at the beginning of the year,” this announcement is positive news for Abercrombie & Fitch after wading through half a year of negative publicity which occurred after comments Jeffries made in a 2006 Salon article resurfaced online as part of a Business Insider article published on May 3, 2013.
“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.”
The story, which was picked up by traditional and digital media outlets online, including The Washington Post and The Huffington Post, created a great deal of negative mentions for the company, but ultimately produced a great deal of public relations mentions.
According to the International Business Times, the negative publicity resulted in a decline in shares that totaled as much as 12 percent. Sales, which financial analysts forecast as being “under fire for its CEO’s controversial comments,” dropped by 8.9 percent in Q1 2013.
One example of the harsh tone shared by members of the media and online consumers can be found in a Business Insider article published in May 2013, which opens with the following:
Teen retailer Abercrombie & Fitch doesn’t stock XL or XXL sizes in women’s clothing because they don’t want overweight women wearing their brand.
The negative publicity did not go unnoticed. As the company strove to continue to attract “cool kids,” Abercrombie & Fitch’s stock experienced a noticeable decline and marketing analysts and bloggers were constantly critiquing Jeffries’ “strategy for finding a way to fill Abercrombie & Fitch’s empty stores” as a failing endeavor.
“The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported,” said Jeffries.
The decline in female business is not surprising. Many of the articles and mentions responding to the Business Insider article published in May suggested that Abercrombie & Fitch promotes the belief that “being overweight isn’t sexy or cool” (as seen in the video below) by excluding XL and XXL sizes for women but not for men—potentially suggesting that women larger than…well, a Large a.k.a. plus-sized, are not cool or sexy.
Interestingly enough, the retailer decided to change its policy and stated that it would offer a limited selection of plus-sized clothing for women online starting in 2014, according to CNNMoney. YouTube verified vlogger MrRepzion (who has more than 200,000 YouTube subscribers) addressed Abercrombie & Fitch’s change of heart in one of his videos and urged his viewers not to support Abercrombie & Fitch’s “snobbery and arrogance” by investing their money in such a “fickle” organization and claims that, “It serves them ***damned right.”
According to Forbes Contributor Barbara Thau, “Full-figure women’s clothing is a large and growing, billion-dollar business.” Many suggest that ANF’s change of heart and size chart is directly related to the fact that plus-sized women’s clothing generated a whopping $16.2 billion in sales for the year ended November 2013, up 7.2% from the year-ago period (according to market research firm the NPD Group).
With the company experiencing so much backlash and still facing the issue of increasing sales in store and online, one could argue that increasing the range of sizes available on its size chart would be a positive move for the company even if it was forcing them away from predetermined brand concepts and its exclusively “cool kid” culture.
In a December 2013 article published via The Huffington Post, titled, “Dear Abercrombie: Thank You for Allowing Us ‘Fat, Uncool’ Kids to Buy Your Clothing Online,” you can see that the company received less backlash for its decision to listen to consumers’ complaints, but negative backlash nonetheless.
So now with sales declining, Abercrombie is now allowing us fat people to purchase their clothing online. Honestly, I have been able to wear Abercrombie clothing for years, now. But in honor of all my “fat, uncool” friends, and because I am still a “fat, uncool” person, I will always refuse. I would rather wear dignity any day of the week.
It could be surmised that the ongoing issue for Abercrombie & Fitch lies not in the fact that they changed their minds—we are all human and, of course, bound to do so when the majority of the public starts shooting daggers our way—is that the change in policy didn’t seem genuine in any way shape of form.
Yes, the company will now make larger sizes available to plus-sized women, but the fact that they must shop in the privacy of their own homes and not be able to enjoy publicly shopping in their store (i.e. forcing the “cool kids” to interact with the fat and ugly uncool kids) shows that they have no true intention of backing down and that the additional sizes were only added to reduce the amount of criticism and negative mentions in the media and online forums.
Hopefully, the organization will be able to bounce back and not fall victim to its competitors. For example, retailer H&M received a great deal of positive mentions while being compared to Abercrombie & Fitch in 2013 for not only offering a larger range of sizes for women’s clothes, but also for “promoting a healthy body image” by launching a swimwear campaign that featured a plus-sized model. Although, the additional placements were certainly unintentional on H&M’s part, this is a clear example of how negative publicity can still be good publicity…it just doesn’t mean it will be “good” for you!
About Abercrombie & Fitch Co.
Abercrombie & Fitch Co. is a leading global specialty retailer of high-quality, casual apparel for men, women and kids with an active, youthful lifestyle under its Abercrombie & Fitch, abercrombie, Hollister and Gilly Hicks brands. The Company currently operates 890 stores in the United States and 166 stores across Canada, Europe, Asia and Australia. The Company also operates e-commerce websites at www.abercrombie.com, www.abercrombiekids.com, www.hollisterco.com and www.gillyhicks.com.
- The Huffington Post | Abercrombie & Fitch Apology: Brand Issues Another Mea Culpa For CEO’s Past Comments
- Business Insider | Abercrombie & Fitch Desperately Needs To Fix 3 Problems
- Forbes | Is Anyone Shopping At Abercrombie & Fitch? Apparently Not
Image courtesy of the Sitch on Fitch blog.