Prepared by: Olga Gnedash, Alexander Petrushin, Brent Hanson Abercrombie & Fitch Co. Company analysis Prepared by: Olga Gnedash, Alexander Petrushin, Brent Hanson

Agenda Company Overview Business Description History Industry and competitors SWOT analysis Unique Sales strategy Recommendations and Conclusion

Company Overview Specialty retailer that sales casual apparel Operates under 5 brands: Abercrombie & Fitch, AbercrombieKids, Hollister and RUEHL and Gilly Hicks: Sydney brands. The company operates in the US, Canada, UK. Operates 1039 stores worldwide (February 2008) 80,100 employees

What Abercrombie and Fitch brands are you familiar with?

Abercrombie Established July 1998 7-14-year-old age group 170 stores in US “Classic cool” theme Logo Moose

Hollister Co. Established July 2000 14-18-year-old schoolers 455 stores in US and Canada Theme “SoCal” Logo Seagull

Abercrombie & Fitch Established June 1892 Targets 18-22 year-old age group 357 stores Theme “Casual Luxury” Logo Moose

The RUEHL Established September 2004 Targets 22-35 year adults Operates 22 stores Logo French Bulldog

Gilly Hicks: Sydney Established January 2008 Operates 5 stores Targets 18 and up Logo Koala Theme Australia

History David T. Abercrombie established Abercrombie Co. on June 1892 In 1904 wealthy Ezra Fitch became a co-owner In 1909 issued and mailed 50,000 copies of 456-page catalog In 1917 A&F became the largest retailer in NYC that sold sportswear In 2006 A&F opened its first store in Canada, In 2007 first store in UK

Industry and Competitors Retail Industry (Special Lines) 40,000 companies operate 90,000 stores Summarized annual revenue $130 billion Dominance of large companies Slowdown in spending on clothing Labor-intensive industry, high demand for qualified and skilled sales reps Two main sales seasons- fall (main for A&F) and spring

What are Abercrombie and Fitch main competitors?

Industry and Competitors Gap, Inc., The Target Corporation Limited Brands American Eagle Outfitters, Inc. Benetton Group SpA Tommy Hilfiger Corporation Urban Outfitters, Inc. Wet Seal, Inc, The Aeropostale, Inc.

Competition Abercrombie & Fitch American Eagle The Gap Established 1892 1904 1969 Revenue (billion USD) 6.91 2.8 16 Number of stores 1039 697 3139 Employees 80,100 20,600 150,000 Scope of operation US, Canada, UK US More than 19 countries

SWOT Analysis Strengths Weaknesses Strong brand portfolio Strong financial performance Robust balance sheet Weaknesses Low inventory turnover ratio Limited geographic reach

SWOT Analysis Opportunities Threats Expansion in new markets Investment in infrastructure Development of new concepts Increasing online sales Threats Counterfeit goods Increasing rental rates in US Slowdown in the US economy

Unique Sales Strategy: IMC High integration of Marketing efforts Recruits high energy “brand reps” largely from college campuses who dress in A&F Issues subscription catalog – A&F Quarterly (350,000 Americans has subscribed) Issues “magalogs”

Unique Sales Strategy Emphasis on high level of service, quality, brand image Targets Generation Y Positioning strategy involves the use of overt sexuality advertising appeal http://www.youtube.com/watch?v=9dqEcKcadUE&NR=1

Unique Sales Strategy: Publicity Positive 18-22-year-olds Controversy surrounding its ad campaign has added allure and exclusivity 34 consecutive quarters of record sales and earnings Negative Parents Organizations Legislators “Playboy for kids”

Unique Sales Strategy: Store Layout comfortable armchairs designed Large photos on the walls extremely loud, energizing trance and dance songs dimmed light unique A&F’s scent in the store

Unique Sales Strategy: Web site Allows to download music, e-post cards Provide useful information, FAQ Shop online Watch Abercrombie TV Create ANFMail accounts

Recommendations and Conclusion Long-term recommendations Open a discount clothing store Invest in overseas expansion (Europe, Japan) Short-term recommendations Sponsor college events Strengthen rebellion and controversy image Emphasize on online shopping Review the choice of magazines where A&F places ads

Thank You For Attention