Abercrombie And Fitch Earnings Continue To Plunge, ‘Cool’ Shoppers Notwithstanding
Abercrombie and Fitch continues to struggle many months after it was revealed that CEO Mike Jeffries is only interested in selling to the top caste of cool, skinny kids.
According to MarketWatch, Q2 profits fell 33% and shares tumbled 18% to $38.50 in premarket trading. But Abercrombie and Fitch aren’t the only clothing retailers having such trouble. Peers like American Eagle and Aeropostale also offered a current-quarter profit view below consensus expectations.
“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,” Jeffries said. “In that context, we are planning sales, inventory and expenses conservatively for the remainder of the year.”
Analysts say that Abercrombie and Fitch’s drops are likely the result of a “fickle” customer base, changing tastes in fashion, and store promotions which causes customer loyalty to dip.
Since much of teen spending is tied to their parents’ wallets, another possibility is that some customers just aren’t willing to pay the high ticket prices on Abercrombie and Fitch products, or simply do so less often.
Though experts haven’t made a link between Abercrombie and Fitch’s falling popularity and Jeffries’ controversial comments, we can’t help but wonder if they’re partly to blame for the drop in brand respect. Also, could they have unintentionally caused some sort of ripple effect among other “preppy” brands?
Jeffries’ comments are nearly 10 years old, but sparked a wave of criticism, protests and boycotts after they started making media rounds again over the past several months. He said:
“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.”
Maybe cool, good-looking people just don’t have enough money to keep Abercrombie and Fitch going.
