Reality Check for Abercrombie

Abercrombie and Fitch has negotiated a new contact with long-time CEO Michael Jefferies after an activist investor had called for his replacement. After years of lagging return on investment the controversial CEO has lived to see another day.

Hollister men's and women's

Hollister men’s and women’s

Jefferies is among a small cadre of visionary retail executives and a known micro-manager. He remade a tiny travel and sporting goods retailer in the ’80’s into a teen retail powerhouse. It has been a rocky road laced with discrimination lawsuits and boycotts over policies and racy marketing.

When a customer choses to shop a specialty store they already relate to the brand on some level. Most customers visiting an Abercrombie & Fitch, Hollister or Gilly Hicks store aren’t discovering the store for the first time. They already identify with the upscale, American, traditional style, with a big dose of teenage sexual tension.

The appeal of the brand experience is the “maybe I’m too young to be here” rich decor, dim lighting, loud music and strong fragrance wafting through the air. It is retail theater at its best, even if it is a tad annoying for the credit card-carrying accomplice. I actually love to visit Gilly Hicks. (Too bad they are closing them down to focus on their core business.)

Things have changed in teen retail since the boom times post-Recession. The last few years have seen the explosion of fast fashion emporiums of Forever 21, H&M and Zara.

Abercrombie Holiday 2013

Abercrombie Holiday 2013

Forever 21 operates very large stores that carry complete looks… apparel, accessories and shoes merchandised throughout the store. A budget conscious Millennial can walk out with an armload of cheap chic clothing and accessories for $50. They serve up a huge range of fashion and uber-edgy looks in less than stellar quality, but most of their customers don’t care. They sell them in women’s, Love 21 sizes which area a bit bigger and plus sizes as well. No girl leaves Forever 21 without finding something that fits.

Abercrombie is stuck in the flip phone era of teen fashion. It is not the appeal of their clubby stores. It was their original calculation not to promote during the height of the Recession and their unwillingness to face the reality that today kids are bigger, than their cultural vision of a preppy, blonde waif. The narrow-minded intention to cut everything close to the bone has cost them significant sales. What store today can afford to lose a motivated customer segment over 1-2”?

 I can personally attest to this. My 13-year-old niece (who proclaims Gilly Hicks her favorite store) has been slightly bigger than the Gilly Hicks size large since she was 11 1/2. She relates to their clean, lounge lifestyle and sporty looks. Unfortunately, 90% of what she tries on doesn’t fit because they don’t carry an extra-large. She can only buy their most oversized pieces. We usually walk out empty-handed, in spite of Gilly Hicks great promotional prices.

We don’t bother to shop Abercrombie, even though we both like the traditional aesthetic and quality of their merchandise. We know the styles are cut too small and she’ll end up discouraged. In fact, Abercrombie’s key competitive advantage over Forever 21 is their more traditional looks. There are plenty of girls in America that relate to A+F’s classics with a modern twist, over fast fashion; and there aren’t any other national retail brands for kids that offer modern, traditional looks. (Except American Eagle and Gap, which are quite different overall.)

Therefore, we end up at Forever 21. As an industry veteran I hate the quality, but we can always find something acceptable and reasonably tasteful in their giant assortment. My niece always leaves Forever 21 feeling good about herself.

If Jefferies wants to make his bonus performance targets in his last act (He’s 69) He is going to have to see the teen market as it is today. It’s not 2007.

Dix&Pond is the blog of Dix & Pond Consulting Creative and strategic consulting for retail, wholesale apparel,  footwear, consumer products and branding agencies. Follow me to get the latest posts

 

 

 

 

 

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Restoration Hardware’s New Boston Home

RH's Boston store is a branding tour-de-force.

RH’s Boston store is a branding tour-de-force.

Expect to be awestruck, breathless, converted to a quiet, monastic, simple life. The Restoration Hardware (now called RH ) has completed their renovation of one of Boston’s most iconic Back Bay buildings into one of the most moving retail brand experiences I ever had.  In my career as a trend watcher, I have been in countless thousands of them, but haven’t been this moved by a retail experience since the first time I stepped into the Food Halls at Harrod’s.

RH has recently completed their renovation of the former retail location of the venerable Louis of Boston, at the corner of Berkeley and Newbury Streets in Boston. The grand, free-standing building was built in 1864 for The New England Museum of Natural History. (which later became the Museum of Science and moved to The Charles River). It was vacant for several years when Louis moved to the South Boston waterfront. I wondered what retail tenant could do justice to this uniquely beautiful property. Ralph Lauren topped my short list for companies with the capital and vision to pull it off. RH was not on my list.

The floral area on the first floor.

The floral area on the first floor.

The store is a triumph.  It is the essence of modern, traditional home furnishings… spare, classic, oversized and dressed with buttery leathers and neutral linen. It is masculine and quiet, but emotionally rich on every level. It is palatial and clubby. RH has hit exactly the right note blending contemporary touches like the commanding glass elevator and slick concrete stairwell, while paying homage to the sheer beauty of the original architecture of this edifice. It is a textural, neutral symphony, with a hip background track. It is like experiencing their products through vintage sepia photos.

This tour-de-force brand experience is not to be missed. Expect to be converted to an RH disciple. It may have you shopping for a larger home to fit their enormous furnishings.

Dix&Pond is the blog of www.dixandpond.com Creative and strategic consulting for retail, wholesale apparel,  footwear, consumer products and branding agencies. Follow me to get the latest posts

This commanding stone bar is for in-store events.

This commanding stone bar is for in-store events.

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