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Abercrombie name to shrink from clothing

Abercrombie & Fitch Removing Logos From Its Clothing

NEW YORK (AP) - The Abercrombie & Fitch logo has lost the power it once wielded.

Shares of Abercrombie & Fitch Co. tumbled Thursday after reporting weak sales as more teens shop elsewhere.

The company is trying to stock trendier clothing - and it turns out that means stripping off the once-prized Abercrombie logo.

It is a major change for the retailer, whose sweatshirts and T-shirts emblazoned with its name long held major cachet with teenagers. Now, individuality is the name of the game.

"Personal style, specifically with teens, is becoming less about fitting in and more about standing out," said Lauren Wolfenden, a senior advisory analyst at WGSN, a fashion trend consultancy. "A&F has wised up to this by phasing out the cookie-cutter logo-ed product look and bringing in trendy pieces that can be worn in a multitude of different ways."

A&F and other traditional teen stores have to adapt in an uphill battle to turn their businesses around as mall traffic drops and shoppers' tastes change.

A slowly recovering economy is making parents and teens to think twice about splurging on clothes. Expensive standbys like Abercrombie also have lost business to "fast fashion" chains like H&M, known for quickly churning out trendy $9 tops.

Teens are also spending less time at the mall and more time researching and buying on mobile devices. And when they do buy, they're more likely buying the latest gadget than filling their closets.

Last week, Aeropostale last week reported its seventh consecutive quarterly loss on slumping sales. It also forecast another loss in the current quarter.

At the same time, Aeropostale, based in New York, reinstated Julian Geiger, its former CEO.

Earnings at another competitor, American Eagle, have also declined on weak sales.

Mike Jeffries, A&F's CEO, said in a statement that the retailer has made progress in stocking trendier clothing and said the improvement is "clearly evident" in its back-to-school business.

"In a continuing challenging environment, our sales for the second quarter were somewhat below plan, but we have seen modest improvement since the back-to-school floor set," he added.

A&F has been shortening the time from developing a design to shipping the clothing to the stores. It's also changing its color palette.

WGSN's Wolfenden said Abercrombie announced earlier this year that it would start using black in their collections, something it had never done before. She praised some of the current fashions in the stores, which include Aztec printed silky pants, sleek maxi-dresses and slouchy T-shirts with scenic images and French sayings.

But the big change, of course, shoppers are seeing is clothes that don't shout the Abercrombie name.

For the fall shopping season, A&F has reduced its logoed merchandise by half, and plans to go further.

"In the spring season, we are looking to take the North American logo business to practically nothing," Mark Jeffries, CEO of A&F told investors on a conference call

In a note to investors Thursday, Richard Jaffe, an analyst at Stifel Nicolaus, noted that "it's taking time to win back customers." But he believes that the merchandise changes are "gaining traction."

A&F said it earned $12.9 million, or 17 cents in its fiscal second quarter. That compares with $11.3 million, or 14 cents per share, a year earlier.

Earnings, adjusted for non-recurring costs, came to 19 cents per share. Analysts surveyed by Zacks Investment Research expected 10 cents per share.

The New Albany, Ohio-based retailer reported that revenue fell 5.8 percent to $890.6 million, short of analyst estimates.

Revenue at stores open at least a year dropped a steep 11 percent, including 8 percent at U.S. stores.

A&F's shares fell nearly 6 percent, or $2.57 to $41.43 in late morning trading. American Eagle's shares fell nearly 2 percent, or 25 cents, to $13.95. And Aeropostale's shares slipped more than 2 percent, or 9 cents, to $4.07 in late morning trading.

Join the discussion

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blbowers52 August 29 2014 at 8:28 AM

I quit shopping there when my 30+ kids were teens. Too much sex not enough value. Any store that offends the parents loses their pocketbook.

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3 replies
mollymguire August 29 2014 at 8:46 AM

Fitch should teach their little robots they hire what customer service is all about. The little snits I've had to deal with were outrageous, not in a good way. If an old lady walks in or a fat person, they're NOT there to buy clothes for themselves. They could drop a ton of money for their kids or grandkids. The sales personnel should be tripping over themselves for those customers instead of ignoring them....

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1 reply
kcarthey mollymguire August 29 2014 at 9:25 AM

Neimans learned the lesson early. As the only upscale store in the only real city within hundreds of miles of that oil filled wasteland called Texas, they recognized their early customers were often fat, undereducated, crude and very, very rich. They never knew who was and who wasn't -- some of those old boys cleaned up well -- and they treated all commers well.

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rounseville0723 August 29 2014 at 7:31 AM

The company hasn't yet realized they cut their own throat and have bleed to death.

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kittenblu August 29 2014 at 8:04 AM

I enjoy watching this company slowly die. Nothing will ever change peoples mind until that Jeffries idiot is gone.

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cfishernj August 29 2014 at 8:05 AM

They need to face the facts; With the high cost of education their clothes are just too expensive.

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Denny August 29 2014 at 8:11 AM

Jeffries killed his own company...when he is gone things MIGHT pick up again

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Sally August 29 2014 at 9:45 AM

Let's see. take your logo off your clothes because no one wants to be seen with them. Then stock the same high priced clothing (that "only the cool kids wear" according to Jeffries.) No surprise their sales are plummeting.

Flag Reply +4 rate up
jcaffarella August 29 2014 at 10:17 AM

Dropping the logo from A&F apparel is a big mistake. Without the branding, it's generic apparel, so why shop A&F at all? I agree with others that the lack of traffic in the stores is likely due to the poor customer service. My daughter likes A&F apparel, so I shop there from time to time. The apparel is overpriced and is mediocre quality at best. Sadly, A&F could go out of business and no one would miss them, except maybe my daughter who doesn't but her own clothes. I do. A&F needs to better understand who their customer really is.

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patriot1too August 29 2014 at 11:08 AM

That store was always about catering to girley boys and confused silly girls. Went to the mall and passed their store. Out front stood some loopy saggy pants sideways cap girely boy without a shirt on. He3 was their PR stunt to get other girely boys and confused silly girls to go inside and spend money. They are a joke. America is sick of these confused girly boys. They need to grow up, get a job, join the military.

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James Meehan August 29 2014 at 9:42 AM

Like the Republicans ... Brand recognition is a b!tch. You can't hide who you are to con people.

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