Abercrombie & Fitch: All-American Rejects

http://www.trendboardnyc.com/wp-content/uploads/2013/05/ANF-hi-res-1024x682.jpghttp://www.trendboardnyc.com/wp-content/uploads/2013/05/ANF-hi-res-1024x682.jpgAbercrombie & Fitch: All-American Rejects

[Updated]

It was a long time coming but the day finally came.  After seven long years a 2006 Salon.com interview with Abercrombie & Fitch’s CEO Mike Jeffries went viral in all the wrong ways.  Through numerous controversies, including a $40 million dollar class action discrimination suit settlement in 2005, the public has reawakened to A&F’s “Exclusionary Marketing” strategy and it couldn’t have come at a worse time for the struggling brand.  Jeffries wants you to want to be an “All-American” cool kid, but after decades of success the strategy is finally backfiring.

Jeffries’ set the A&F mantra years ago.  Whether its employee manuals (jezebel.com offered this eye-opener),  store policies or label image – Abercrombie is about the “All-American” image.. if the meaning of “All-American” was still stuck in the 1950s.  Tall, rail thin and preferably blonde. Everyone else simply doesn’t belong.

“In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong (in our clothes), and they can’t belong. Are we exclusionary? Absolutely.” – Mike Jeffries, CEO, A&F in a 2006 Salon.com interview

Nonetheless, this is Abercrombie’s America and they want you to want it and want to be a part of it.

The Jeffries plan: A&F is for the cool kids. It’s not meant to be seen on those who don’t make the cut. A&F had long battled accusations of employee discrimination based on ethnicity as they simply did not fit the “All-American” mold.  A mold that also dictated unhealthy body image. Speaking on background a couple of former employees reflected on the period following the class action discrimination suit.   “A&F took steps to diversify their hiring after the lawsuit but there was almost an air the company hid minority employees in the back,” said one former store worker who now works for another major.  “They relegated [minority workers] to stocking and managing inventory to keep them out of sight.”

Most brands would tread lightly in this territory, but not Jeffries.  Tommy Hilfiger once spent a decade on damage control dispelling completely unfounded accusations of racism. It was an arduous task that at one point required Oprah’s intervention.  Meanwhile, Jeffries is blurring the lines of how far brand exclusivity can go before it gets twisted.

Brand Tragedy

“Abercrombie did exactly what they were supposed to do as a brand. The only mistake is that they chose to be so irresponsible in stating their message that way,” said one marketing consultant speaking on condition of anonymity. “A&F does nothing different from any other company. Mercedes-Benz, Hot Topic, they are all doing it.  Hot Topic has targeted fashion forward teens through pop-culture and music to the ‘exclusion’ of the 30 and over crowd. This is true in everything from the music they play in-store to the store layout and the type of sales associates they hire.” However, there’s difference between playing to a target market’s preferences and categorically excluding buyers and employees.

Hot Topic fulfills the kind of tween dreams an average 45-50 year old would run from screaming. What would their reaction be if their brand image were slighted by a run on their products by members of the PTA? Apple set record-breaking sales getting the not-so-tweeny Gen Xers to join the “in crowd” while keeping their uber-hip base of graphic designers, artists and Brooklynites close to home.  Samsung’s Galaxy S4 campaign takes extraordinary steps to point Apple’s evolution.

Jeffries’ perspective is to stay the course. Never mind the law suits, demands for more social responsibility or promotion of healthier body images. Forget the years of outrage over refusal to stock larger sizes. Their competitors have figured it out, A&F has stayed the course riding their depleted stock price straight down the halfpipe on a skateboard.

The 90s called and…

It worked through the 90s, why wouldn’t it continue to work?  In a separate interview a former employee familiar with the corporate head offices intimated that A&F had been enamored with outdated designs for a while now. Whether it was internal politics or simply falling out of touch the brand has been slow to react.  To their credit, they have tried shaking up the market experimenting with a handful of new designs but have failed to gain attention. The current backlash only hastens the downward spiral. As one angry internet comment offered, “Hey Abercrombie, the 90s called and they want their clothes back!”

In a rapidly changing landscape ‘All American” has taken on a distinct new direction.  Here are some statistics:

  • Americans are getting bigger. The average American male is 5’9.5” and 191 lbs. while the Average American girl is 5’4” 164 lbs.  Americans by some measures are 30-50 lbs heavier than they were 40+ years ago.
  • Americans are getting more diverse. America is increasingly made up of ethnic sub-groups poised to become the majority. Over 30% of the country is Hispanic/Latino, African-American or Asian, with Hispanic-Americans accounting for more than 50% of the population growth in the last decade.
  • America is growing in ways it never grew before.  Hispanics, at 17% of this country are the fastest growing demographic segment.  Do they meet A&F’s “All-American” standard?

Losing touch has hurt companies such as Toyota and Cadillac whose average buyer age is pushing into the mid-40s.  Not a great place to be if you are hoping to bring the next generation on board.  As a former insider shared, “they’re holding on to the 90s and they’re barely waking up to times changing”.  This was exactly what happened to Toyota who solved some of their problems by launching Scion.  Cadillac has yet to recapture their glory days, though their SUVs did tap into the Hip Hop Generation.

However, Cadillac, unlike A&F, didn’t exclude their new found fans, but rather embraced them.  They too shifted their marketing further towards a New Americana even experimenting with campaigns driven by French electronic act Justice.  If a car company can figure it out, surely A&F can catch up.

Larger sizes translate into larger sales.  Ask H&M which has been widely praised for carrying a wider range of sizes and run new marketing featuring a plus-sized model.  There’s gold waiting to be uncovered.

#Winning?

ANF stock price

Meanwhile, on the other side of town, that thud and splattering sound coming from Downtown is the sound of A&F stock hitting the pavement on Wall Street.  The now infamous CEO interview reared its ugly head at a time when A&F was trying to right their financial ship.  The chain had showed modest improvement, but now it appears their downward trajectory includes reduced earnings forecasts and over 50 store closings.  A sharp decrease in sales figures [updated], as much 13% in-store and 17% direct, have raised red flags.  The company attributes their problems to  inventory, those outside the company attribute their problems to a weak lineup of product offerings and an ailing reputation.

Since the viral remarks the firm has taken further beating.  In a recent retail report from YouGov BrandIndex A&F’s reputation has “tanked” among 18-34 year olds.  This is especially when compared to their rivals H&M and American Eagle.

Critics argue that A&F made no adjustments for a post-crisis consumer marketplace.  Nonetheless they’ve stayed the course in terms or pricing, design and marketing.  The dream of the 90s is alive but it’s not in Portlandia.

Selling the American Dream

A&F sees their global growth opportunity as their next big move, bringing non-US buyers the “All-American” experience.  The strategy hasn’t benefited the bottom line.  Public outrage has taken its toll.

Jeffries has since apologized in a statement that reads: “We want to reiterate that we sincerely regret and apologize for any offense caused by comments we have made in the past which are contrary to these values.”  Is it too little or too late?

Rise of the consumers

The other thing that has changed since the 1990s is the power of the socially networked consumer.  From the Twitterverse to YouTube backlash can be harsh.  In this case, A&F’s cavalier attitude towards damage control has only exacerbated the situation.

  • Protestors have gone after their headquarters
  • 70,000 people have signed a petition
  • A YouTube campaign called #FitchTheHomeless has gone viral as an enterprising consumer activist has taken to the web to the tune of 7.5 million hits (see below).

 

What is the one common theme that seems to tie the A&F fiasco together?  Their distorted interpretation of a non-existent “All-American” as their brand advocates.  In an America of changing demographics…

  • All-American is Hispanic/Latino/Chicano, African-American, Asian, Middle Eastern and more.
  • All-American is having curves and a healthy body image.
  • All-American is gay.
  • All-American is nerdy.
  • All-American is an inclusive melting pot. Regardless of whether we achieve it, it’s our heritage and cultural undertone that people are striving for each and every day.
  • All-American is a drive to achieve

A&F loves the free market. They have enjoyed it on the ride up. Now they are tasting the ride down as empowered consumers look for them to change.  While it isn’t game over for A&F, they have some explaining to do.

Big Bang Theory

The demographics, media and even television get it.  Movies, TV… everyone is nerding out.  For every Gossip Girl there is a Spider-Man or Big Bang Theory showing us its cool to “nerd out”.  Bullying is still a reality but its a reality America is actively trying to change.  Encouraging the “cool kids” to separate themselves is a fading theme and, if consumer backlash has taught A&F anything, a failing theme.

The “All-American” #koolkid has changed a lot since the days when A&F execs went to school. If not by simple demographic shifts and economic changes, at the very least the zeitgeist of the 90s has given way to 20 years of growth. Enough time for a new generation of Millenials to exact their influence. It’s time for a re-brand the “All-American” to grow with the times. This alone would help the A&F gaffe machine shift to target marketing from discriminating and offending.

Perhaps the buddy-cop movie 21 Jump Street can provide some insight.  In the movie, two classmates from high school, one a “nerd” and the other a dashing jock join the police academy and form a tight friendship where in the past they had never known how much of a connection they shared.  When assigned to return to high school undercover there was an immediate belief that the nerd (played by Jonah Hill) would struggle to fit in while the “jock” (Channing Tatum) would rule the roost.  Upon entering the school parking lot they were taken aback by hipsters, nerds, goths and a host of other groups that functioned and interacted while the age old nerds/jocks paradigm had faded into obscurity.  In fact Tatum’s jock character needed to adjust hard and fast to becoming a #koolkid and he found kindred spirits as a science nerd while Jonah Hill fit in with the new breed of #koolkid and… [spoiler alert] he becomes a hero and gets the girl in the end!

 

[Update]

Fashionista.com reports that A&F responded to the allegations their employee manual sets unfair standards and requirements for employee dress:

Abercrombie & Fitch does not require its associates to purchase clothes from the Company, nor to wear the Company’s clothes unless the clothes are given to them. In addition, Abercrombie does not require women to wear men’s clothes. The Company respects each associate’s individuality, but like any other corporation, the associate dress policy requires that employees dress in a respectful, professional manner.

 

While several anecdotal reports have surfaced regarding A&F employee practices, some have yet to be substantiated.  The media firestorm continues and the backlash has not been quelled by the firm’s responses. Our sources did not confirm any such manuals but did remark of rumors heard while in A&F employ, though they also shared generally positive experiences in both the corporate office and store level.

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