Abercrombie bets future earnings on a turnaround

Andy Uhler Aug 26, 2015
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Abercrombie bets future earnings on a turnaround

Andy Uhler Aug 26, 2015
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Abercrombie & Fitch is reporting second quarter earnings just a week after its stock hit a more than six-year low, and the retailer announced it is restructuring its front office by bringing in a batch of new designers and executives to reinvent the brand.

The company is trying to get out of the teenage market in favor of shoppers a bit older – college students and 20-year-olds. Elliot Morss, of Morss Global Finance, says he thinks Abercrombie is targeting the right market.

“That age group still goes to stores,” Morss says. “So I think this move from the really young people to the older people, given that they aren’t really that well established online, is probably a pretty good move for Abercrombie & Fitch.”

So much of Abercrombie’s business was the cool-factor of the brand itself – shirts and hats emblazoned with its name. Hayley Phelan, who writes about fashion, says kids aren’t really into that anymore. 

“Teenagers are just not very loyal to brands,” she says. “They just want a cheap, cute top that they feel is cool and they can afford, and that they can wear once and then buy something else later.” Buy something else later at stores like H&M and Zara. And buy it cheap. 

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