Abercrombie & Fitch | |
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Type | Public (NYSE: ANF) S&P 500 Component |
Establishment | Manhattan, New York June 4, 1892 |
Headquarters | 6301 Fitch Path New Albany, Ohio 43054 U.S. |
Key people | David T. Abercrombie, Founder Ezra Fitch, Co-Founder Michael S. Jeffries, Chairman & CEO Bruce Weber, photographer John Urbano, marketing film director |
Industry | Fashion retail[1] |
Theme | Casual luxury |
Color scheme | Grayscale |
Target consumer age | 18 through 22[2] |
Apparel style | Casual wear / Sportswear |
Abbrev. | A&F / ANF / AF |
Logo | Moose |
Store locations | Entire Company: 1081[3] A&F alone: 357[3] United States, Canada, United Kingdom, Italy and Japan |
Revenue | Entire Company: US$3.54 Billion (FY 2009)[4] A&F alone: $1.6 billion (FY 2007)[5][6] |
Net income | US$272 Million (FY 2009)[4] |
Number of employees | Entire Company: 10,000 (2008) |
Website | www.abercrombie.com |
Abercrombie & Fitch (A&F) (NYSE: ANF) is an American retailer, currently headed by chairman and CEO Michael S. Jeffries. A&F specifically focuses on casualwear and accessories for a target consumer ages of 18 through 22.[2] With over 300 locations in the United States, the brand has embarked on international expansion throughout various world markets.[7] The company also operates three off-shoot brands: abercrombie (childrenswear), Hollister Co., and Gilly Hicks. The company also operated a post-grad subsidiary brand, Ruehl No.925, that was shuttered in early 2010.[2]
Founded in 1892 in Manhattan by David T. Abercrombie, A&F had been an elite outfitter of sporting and excursion goods. It struggled financially from the late 1960s until it was purchased by The Limited in 1988 and repositioned, under the management of Mike Jeffries, as the aspirational "Casual Luxury" lifestyle brand in present form.[8]
Especially since 1997, the company has consistently kept a high-profile in the public eye - both positive and negative - due to its type of advertising (including its own film and magazines), its philanthropy, and its involvement in legal conflicts over branding, clothing style and employment practices.
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The Abercrombie & Fitch company headquarters, or "Home Office", is located in New Albany, Ohio.[9] Home Office is designed as a campus of sorts, and is referred to as such. The company's merchandise distribution centers (1,000,000sq.ft) are located exclusively on campus to help ensure brand protection.[9] Also on campus are mock-up stores, one for each A&F brand, where store layout, merchandise and atmosphere are determined.[9]
The company also has a European office in Milan, Italy.[10][11]
The following are key corporate officials:[12]
The company uses "brand representatives", now called "models," for store customer service. The models had been required to buy and wear Abercrombie & Fitch apparel but may now wear any no-logo clothing as long as it corresponds with the season.[13] An "Impact Team" was created in 2004 to control merchandise within each store and maintain company standards; "visual managers" are responsible for forms, lighting, photo marketing, fragrance presentations and to ensure models comply with the "look policy".[14] Lawsuits have been filed against the company due to alleged discriminatory employment practices. In 2004, in Gonzalez v. Abercrombie & Fitch Stores (see Legal issues & Controversy and Criticism below), the company was sued for giving desirable positions to white applicants, to the exclusion of minorities.[15][16]
On April 14, 2005, Judge Susan Illston of the U.S. District Court for the Northern District of California granted final approval to a settlement of Gonzalez v. Abercrombie & Fitch. The settlement requires the company to pay $40 million to several thousand minority and female plaintiffs who charged the company with discrimination. The settlement also requires the company to institute a range of policies and programs to promote diversity among its workforce and to prevent discrimination based on race or gender. The consent decree governs the recruitment, hiring, job assignment, training, and promotion of Abercrombie & Fitch, Hollister, and abercrombie kids employees. A monitor will regularly evaluate and report on the company's compliance with the provisions of the consent decree.[17] These provisions include:
The official logo of Abercrombie & Fitch is the moose.
A&F is known for its racy marketing photography,[18] rendered to grayscale and featuring outdoors, beach, or mountain backdrops, with common elements of semi-nude males and scantly-clad women.
A&F casts only store employees for marketing campaigns. Casting directors from the home office travel to key A&F regional stores in the United States and to London to hold "casting calls" for employees aspiring to become the next "A&F New Face".[19]
The company promotes its casting sessions, models, and photo shoots in the "A&F Casting" feature online at abercrombie.com. The website also provides a gallery of current photography. Framed copies at A&F stores will sometimes name the model and store.
The Abercrombie & Fitch brand image is heavily promoted as an international near-luxury lifestyle concept.[20] The company began cultivating an upscale image after the 2005 opening of its Fifth Avenue flagship store alongside Prada and other upscale retailers.[21] Having for years used high-grade materials in the construction of its merchandise and priced them at "near-luxury" levels, the trademark Casual Luxury was introduced[21] as a fictional dictionary term with multiple definitions such as "[using] the finest cashmere, pima cottons, and highest quality leather to create the ultimate in casual, body conscious clothing,"[22] and "implementing and/or incorporating time honored machinery ...to produce the most exclusive denim..."[22] This upscale image has allowed A&F to open stores in international high-end locations and further promote the image by pricing its merchandise at almost double the American prices.
Overall, CEO Jeffries calls the A&F image a "movie" because of the "fantasy" that plays out instore.[23] Even some of the clothing is given "story": "You buy into the emotional experience of a movie," Jeffries explains, "And that's what we're creating. Here I am walking into a movie, and I say, 'What's going to be [at] the box office today?'"[23]
Women's Wear Daily calls Abercrombie & Fitch clothing classically "neo-preppy", with an "edgy tone and imagery".[24] The company's fashions have a reputation for luxury, with the majority of designs trend-driven. There is heavy promotion of "Premium Jeans". In early 2010, the company introduced a leather handbag collection inspired by designs from Ruehl.
Its prices are recognized as the highest in the youth-clothing industry.[25] Internationally, prices are almost double those in its American stores. Retail analyst Chris Boring warns that the company's brands are a "little more susceptible" should recession hit, because their specialties are premium-priced goods rather than necessities.[26] Indeed, as the late-2000s recession continues, A&F has noticeably suffered financially for its refusal to lower prices or offer discounts. A&F argues that doing so would "cheapen" its near-luxury image. Analyst Bruce Watson warns that A&F risks finding itself transformed into "a cautionary tale of a store that was left by the wayside when it declined to change with the times".[25]
Abercrombie & Fitch carries men's fragrances Fierce, Cologne 41, and Colden. Women's fragrances include 8, Perfume 41, Wakely, Classic, and Preston. Fierce and 8 are the most heavily marketed fragrances, as they are the signature scents of the brand overall.[27]
The company also offers the Abercrombie & Fitch Credit Card, issued by the World Financial Network National Bank.[28]
Because of extensive counterfeiting of Abercrombie & Fitch goods, in 2006 the company launched a brand protection program to combat the problem worldwide (focusing more on Taiwan, China, Hong Kong, Japan and Korea) by working with legal forces globally.[29] The program is headed by a former FBI Supervisory Special Agent who was part of the FBI's Intellectual Property Rights program, and covers all A&F brands. A&F says that the program "will improve current practices and strategies by focusing on eliminating the supply of illicit Abercrombie & Fitch products."[29]
The company encourages customers to purchase from authentic stores and to report suspected A&F counterfeiting.
The exterior of the modern "canoe store" design features white molding and black louvers.[30] The currently featured marketing image directly faces the entrance. The interior is lighted with dim ceiling lights and spot lighting. Fierce, an A&F fragrance for men, is automatically spritzed from the lighting tracks and manually by employees. Electronic dance music meant to create an upbeat atmosphere may be played at sound levels as high as 90 decibels, exceeding the corporate policy of 80 decibels and comparable to heavy construction machinery and harmful to the ears.[31]
The company operates 1,128 stores across all four brands. The A&F brand has over 353[32] locations in the United States, three in Canada, one in London, one in Milan, and one in Tokyo.
Four flagship stores are currently in operation:
A&F currently has three concept brands apart from its namesake, Abercrombie & Fitch. While referred to as subsidiaries, the brands do not operate separately, but are operated as divisions under the A&F umbrella.
In recent years, Abercrombie & Fitch has engaged in philanthropic and humanitarian projects. In January 2010, the company launched the "A&F Cares" feature on its website to inform the public about its efforts in the fields of diversity, inclusion, human rights, philanthropy, and sustainability.[37]
The A&F Challenge is an annual fundraising event held on the home office campus in New Albany and featuring running, walking and biking, as well as entertainment and food. The funds raised go to the Ohio State University Medical Center's Program for Health, which focuses on "women's cancers and the prevention, diagnosis, and treatment of inflammatory bowel disease."[38]
In 2007, Abercrombie & Fitch partnered with the National Society of High School Scholars at the Carter Center in Atlanta, Georgia to offer $75,000 scholarships to NSHSS members.[39]
Total capital expenditures for 2010 are expected to be in the range of $250 million USD to $260 million USD.[36] $215 million to $225 million is related to new stores, store refreshes and remodels, and approximately $35 million related to information technology, distribution center and other home office projects.[36] The company is on track to open flagship stores in Copenhagen, Denmark and Fukuoka, Japan, as well as shuttering 60 of its namesake stores in the U.S., by the end of 2010[36] Additionally, the company will open 30 Hollister mall-based locations internationally and a second Hollister Epic flagship in New York City.[36]
The Abercrombie & Fitch brand is believed to have reached its maximum growth potential in the American market. International expansion began in 2006, with the long-term goal of opening flagships for A&F (and eventually all its brands), in high-profile shopping centers worldwide "at a deliberate pace".[40][41]
Noting the high profitability of its current international stores, Abercrombie & Fitch has plans to open about 15 flagship locations in total throughout Europe and Asia up to the end of its fiscal 2012 year.[42] The steep number could include openings for its other brands as well.
Canadian expansion is expected to continue, with more mall store locations for Abercrombie & Fitch and its abercrombie and Hollister brands in upcoming years.[43]
The company had been considering European expansion since the early 2000s. Assured that the demand for its brand was strong,[44] it entered the European market in 2007 with its London flagship. Since then, Abercrombie & Fitch has been attempting to secure locations in Italy (Milan flagship opened in 2009), France (2011), Germany, Spain, Denmark (2010) and Sweden.[44][45] Preliminary talks about opening a store in Dublin, Ireland have also been held.[46]
The following are planned flagship store openings:
As with Europe, expansion into Asia holds a strong interest for the company. Having opened Asia's first A&F location in Tokyo, the company will primarily focus on the Chinese and Japanese markets where luxury consumption is high.[52]
On August 19, 2010, Plaza Las Américas mall announced that Abercrombie & Fitch will open a store in San Juan, Puerto Rico, its first in Latin America, in November 2010.
The company has been involved in legal conflicts over its employment practices, treatment of customers, and clothing styles.
In 2004 lawsuit González v. Abercrombie & Fitch, the company was accused of discriminating against ethnic minorities by preferentially offering desirable positions to White American employees.[56] The company agreed to an out-of-court settlement of the class action suit. As part of the settlement terms, Abercrombie and Fitch agreed to pay US$45 million to rejected applicants and affected employees, include more minorities in advertising campaigns, appoint a Vice President of Diversity, hire 25 recruiters to seek minority employees, and discontinue the practice of recruiting employees at primarily white fraternities and sororities.[15][17]
In June 2009, British law student Riam Dean, who had worked at A&F's flagship store in London's Saville Row, took the company to an employment tribunal. Dean, who was born without a left forearm, claimed that although she was initially given special permission to wear clothing that covered her prosthetic limb, she was soon told that her appearance breached the company's "Look Policy" and sent to work in the stock room, out of sight of customers. Dean sued the company for disability discrimination, and sought up to £20,000 in damages.[57] In August 2009, the tribunal ruled the 22-year-old was wrongfully dismissed and unlawfully harassed. She was awarded £8,013 for hurt feelings, loss of earnings, and wrongful dismissal.[58][59]
In a lawsuit filed in September 2009 in U.S. District Court in Tulsa by the Equal Employment Opportunity Commission, 17-year-old Samantha Elauf said she applied for a sales position at the Abercrombie Kids store in the Woodland Hills Mall in June 2008. The teen, who wears a hijab in accordance with her religious beliefs, claims the manager told her the headscarf violates the store's "Look Policy."
In 2010, a Muslim woman working at a Hollister store in San Mateo, California was fired. Before being dismissed, Hani Khan had refused Abercrombie & Fitch's HR representative's demand that she remove her hijab. The representative reportedly stated that the headscarf, which Khan wears for religious reasons, violated the company's "Look Policy". The civil liberties group Council on American-Islamic Relations has stated that the dismissal is a violation of nondiscrimination laws, and filed a complaint with the U.S. Equal Employment Opportunity Commission.[60]
In 2009 Abercrombie & Fitch was fined more than $115,000 by the Minnesota Department of Human Rights for refusing to let a teenage girl help her sister, who has autism, try on clothes in a fitting room.[61] The amount of the fine reflected the company's failure to respond to complaints by the girls' mother and its subsequent charge that the girl in question did not really have autism.
A 16-year-old is suing the company after discovering that she was being videotaped in an Abercrombie & Fitch changing room by an employee, Kenneth Applegate II. Applegate denied the claim, but co-workers discovered his camera days later with the video on it.[62]
In 2002, Abercrombie & Fitch filed a lawsuit against American Eagle Outfitters, claiming that they copied A&F garment designs, among other things. The lawsuit was based on a trade dress claim, stating that American Eagle Outfitters had very closely mimicked Abercrombie & Fitch's products' visual appearance and packaging. Specifically, A&F claimed that American Eagle Outfitters copied particular articles of clothing, in-store displays and advertisements, and even the A&F product catalog. Despite the admission that American Eagle may have utilized very similar materials, designs, in-store displays, symbols, color combinations, and patterns as Abercrombie & Fitch, the court ruled that there was not an excessive level of similarity to confuse potential customers, and therefore the court ruled in favor of the defendant, American Eagle Outfitters.[63]
In 2009, the company filed a lawsuit against Beyoncé Knowles, who uses the onstage name of Sasha Fierce, to stop her from marketing a fragrance named Sasha Fierce, claiming infringement of A&F's own Fierce fragrance trademark.
Since its re-establishment in 1988, Abercrombie & Fitch has faced numerous accusations in regards to its employment practices, merchandise, and advertising campaigns which have been described as sexually explicit and racist.[18][64]
A&F agreed to pay $40 million by the Equal Employment Opportunity Commission ("EEOC") to all African Americans, Asian, and Latinos applicants who were discriminated by the company due to the color of their skin. They argued that the company expected them to work only in the back of the store. EEOC now required A&F to ensure equal opportunity to everyone regarding race, gender, ethnicity, etc.[65]
In November 2009, Abercrombie & Fitch, along with Gymboree, Hanes, Ikea, Kohl’s, LL Bean, Pier 1, Propper International, and Walmart, was added to the 2010 Sweatshop Hall of Shame by the labor rights group International Labor Rights Forum.[66]
Conservative and religious groups called for boycotts of the original American publication of A&F Quarterly (published from 1997 to 2003) for its sexually explicit nature.[67] The magazine contained nude photography by Bruce Weber, articles about sex, and recipes for alcoholic beverages. Also acting as a catalog, the Quarterly displayed the brand's merchandise with information and prices. Advertisements for the A&F Quarterly appeared in Interview, Out, Rolling Stone and Vanity Fair.[68]
Despite a company policy restricting sale of the publication to minors, critics charged that the publication was readily sold to minors. In 2003, an array of religious organizations, women's rights activists, and Asian American groups organized boycotts and protests over the publication, and the "Christmas Edition" of the catalog was removed from stores.[69] Although Jeffries said he chose to discontinue the catalog, because "Frankly, [he] was getting sick of the old one; it was getting boring," on June 17, 2010 the company made the announcement, "The Return of the A&F Quarterly" and invited email subscribers to reserve their $10 copy for a July 17, 2010 in-store release date.[70]
In 2002, Abercrombie & Fitch sold a shirt that featured the slogan "Wong Brothers Laundry Service—Two Wongs Can Make It White" with smiling figures in conical straw hats, a depiction of early Chinese immigrants. The company discontinued the designs and apologized after a boycott started by an Asian American student group at Stanford University.[71] That same year, abercrombie kids removed a line of thong underwear sold for girls in pre-teen children's sizes after parents mounted nationwide storefront protests. The underwear included phrases like "Eye Candy" and "Wink Wink" printed on the front.[72]
More t-shirt controversies occurred twice in 2004. The first incident involved a shirt featuring the phrase, "It's All Relative in West Virginia," a jab at alleged incest relations in rural America. West Virginia governor Bob Wise spoke out against the company for depicting "an unfounded, negative stereotype of West Virginia," but the shirts were not removed.[73] Later, another t-shirt that said "L is for Loser" next to a picture of a male gymnast on the rings gathered publicity. The company stopped selling the shirt in October 2004 after USA Gymnastics president Bob Colarossi announced a boycott of Abercrombie & Fitch for mocking the sport.[74]
In 2005, the Women and Girls Foundation of Southwest Pennsylvania launched a "girlcott" of the store for selling T-shirts that read, "Who needs brains when you have these?", "Available for parties," and "I had a nightmare I was a brunette." The campaign received national coverage on The Today Show, and the company pulled the shirts from stores on November 5, 2005.[75]
Bob Jones University and its affiliated pre-collegiate schools along with other Christian schools have prohibited Abercrombie & Fitch clothing from being "worn, carried, or displayed" on its campuses because of "an unusual degree of antagonism to the name of Christ and an unusual display of wickedness" in the company's promotions.[76]
After Abercrombie & Fitch raised its price points in 2004, its products have been described as overpriced.[70] After the company opened its flagship in London, the brand was criticized in the UK because the merchandise that was offered to the customers cost double (or even a direct $/£ swap) the prices found in the United States.[77]
Controversy has risen yet again over A&F's Back-to-School 2009 collection of "humor tees".[78] A men's shirt proclaims "Show the twins" over a young woman with her blouse open to two college men. Two other shirts state "Female streaking encouraged" and "Female Students Wanted for Sexual Research".[78] The American Family Association (AFA) disapproves over A&F negligence to the fact that it is a brand looked up to by teens and wants the brand to remove the "sexualized shirts" merchandise.[78]
In 2008, Nationwide Children's Hospital in Columbus, Ohio agreed to rename its emergency room to the Abercrombie & Fitch Emergency Department and Trauma Center in exchange for a $10 million donation.[79] A letter written by the Campaign for a Commercial-Free Childhood, signed by over 100 doctors and children's advocacy groups, argued against the renaming, for the "company's appalling history of targeting children with sexualized marketing and clothing."[80]
Upwards of 70 employees at Abercrombie & Fitch's Fifth Avenue flagship store were not paid their biweekly paychecks for about a month in March 2010.[81] Employees complained managers had been paid, and that the company failed to give a fair explanation to them as to the issue. Some employees were even reprimanded when approaching Human Recourses about the non payment issues.[81] Fox News broadcasted the issue, and was told by corporate that there was an accident in which the employees (upwards of 150) were accidentally terminated out of the system with no warning, and subsequently not paid. This went on for about 2 months.[81]
Improv Everywhere, a comedy group that pulls public pranks en masse, parodied A&F's ads featuring bare-chested male models by having 111 "agents" enter the A&F store in New York City and remove their shirts. This drew mixed, but mostly amused, reactions from customers and staff, but store security quickly ejected the IE members.[84]
MADtv, a sketch comedy television series, parodied A&F's homoerotic advertising images and hiring practices. In these skits, three Abercrombie & Fitch Employees are depicted as vain, vapid, unhelpful, and overly coifed uptight men with names like "Carpenter", "Dutch", "Cougar", "Turtle", and "Storm". They also participate in sports such as waterpolo, crew, swimteam, lacrosse, rugby, skiing, and squash. However, in one sketch, a young woman named "Apple" (Alanis Morissette) reminds the male employees that Abercrombie is also about "girls with sun-kissed skin and medium sized breasts who get together at dawn to play topless flag football."
6teen, an animated comedy, parodied A&F with a fictional store called Albatross & Finch. The employees there are portrayed as attractive snobs. Despite their huge egos and jerky attitude, Caitlin enjoys shopping there.
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