As partially German, I also read business news published by German newspapers. This article particularly caught my attention as it involved the value proposition of popular clothing brand.
Ever since 2011 Abercrombie & Fitch stocks have lost half their value. The company is continuously making losses and are carrying on losing costumers. This can easily be seen by the large amount of sale offers on A&F’s homepages, which did not exist to the same extend in the past couple of years. Specially the European market has been harming the clothing brand to a vast extend.
A&F’s brand image has drastically worsened over the years specially since the interview scandal with the A&F CEO Michael S. Jeffries. Besides ruining the brand image by excluding part of the target your market, the clothing company did not adapt to social trends.
Besides the fact that A&F products are relatively low quality (already ruined after only a few washes) their clothes are incredibly over priced. Thus the average teenage consumer spendings have adapted to the circumstances. The youth is more willing to spend on technology than uniform like clothes; similar looking sweaters with big brand prints on them. Now-a-days the western youth values uniqueness. It is not uncommon for teenagers wanting to have their own individual style. Funny is that due to supply surpluses many sweaters were offered to homeless people, which also refused to wear them.
If A&F does not rapidly change their identity and products, I am very pessimistic about their future.
Overly sexualised advertising to attract young customers