Can Abercrombie & Fitch Be Cool Again?

If you’re in the fashion industry, forget everything you learned in business school about the merits of focusing on a clearly defined niche or creating an exclusive brand that appeals to a coveted demographic segment.

Today’s socially conscious consumer demands diversity and inclusion from the brands they choose to associate with as they consider them to be a reflection of their values and beliefs.

Brands that devote all their marketing efforts to being desirable through exclusion risk alienating the masses. While it may be effective with a small group of big spenders the risk that it will turn broad swaths of society against the brand is too high.

Exclusion Is A Slippery Slope

Like the velvet rope at popular nightclubs separating the insiders who belong in the inner circle from the outsiders clamoring to get inside, what may work for a Lamborghini with a tiny but wealthy clientele can be a recipe for disaster in a broader retail market.

Case in point is Abercrombie & Fitch. The brand rose to popularity with teens in the 1990s and early 2000s when its whitewashed all American image went too far with its oversexualized preppy vibe.

Scantily clad all white male models in provocative poses promoted an elitist sensibility in its advertising campaigns that followed the consumers it was seducing right into the stores.

There they were immersed in dim lighting, loud music and  the scent of heavy perfume. Conspicuously absent from the shopping experience was the diversity of faces that reflect authentic American culture.

Consumers Reject Socially Irresponsible Brands

In maintaining an aesthetic that aligned with the company’s selective but exclusionary brand image, Abercrombie & Fitch even had a “look policy” that banned employees from choosing certain hairstyles and makeup, such as eyeliner.

The company’s retail workers were expected to adhere to a specific physical appearance and dress code, which were so restrictive that if they didn’t violate equal opportunity labor laws, they certainly came dangerously close to it.

In fact, every time the company rejected a prospective employee because they were overweight or had a beard or their skin was the wrong color, was at its core, a discriminatory and socially unjust hiring practice.

But lawsuits aside, Abercrombie & Fitch didn’t fall from grace because it broke the law. What crushed it was the unspoken social contract that all brands must honor if they hope to remain relevant and cool.

The bar is so much higher than mere compliance. Brands must continually innovate and update their products to keep up with changing consumer preferences and trends.

They Want To Buy From Companies That Focus On Them

The narcissistic image that Abercrombie & Fitch crafted by slapping gigantic logos all over just about every t-shirt it sold and being tone deaf to the new more socially conscious Gen Z and millennial consumers paved the path to its demise.

As the demographics of its target audience changed, the brand missed the opportunity to evolve its marketing strategies and product offerings.

It stubbornly dug in its heels at its own peril as sales, market share and its stock price continued to slide precipitously. If Abercrombie & Fitch were doing any market research or monitoring customer feedback, you wouldn’t know it. Leadership missed the early warning signals they needed to change course.

But the walk away here is not to harbor an abundance of caution about breakthrough tactics that help a brand stand out from the crowd.

Dare To Be Different Carefully

Brands just need to be ever mindful about considering the potential consequences of controversial marketing campaigns that could potentially alienate more people than they win over.

After hitting a low point in its brand value and sales, Abercrombie & Fitch started to recover around 2017 when it began cultivating a more mature and conscientious image.

Abandon Outdated Perceptions

The brand continues to distance itself from its controversial exclusionary image. It ditched its “look policy,” stopped using sexualized photos in marketing materials and is diversifying its store associates so they represent all ethnicities and walks of life.

Despite these pivots, Abercrombie & Fitch still has a challenging road ahead to recover from the damage it did in its heyday. As it scrambles to regain popularity by revamping its stores, expanding its size range to serve heavier consumers, and making its pricing more approachable, the brand’s sales have exceeded Wall Street estimates, and it is experiencing a resurgence in popularity on  the back of its new, more inclusive image.

Resurrecting A Brand That Lost Its Way

In August 2023, Abercrombie & Fitch shares soared after the retailer crushed Wall Street’s quarterly earnings and sales expectations and raised its guidance for the year.

Then in November 2023, the company posted a 20% jump in sales, surpassing estimates, and raised its outlook for the full year. In that  same year, Abercrombie & Fitch reported a 20% year-on-year revenue growth of $1.06 billion, topping Wall Street’s estimates by 7.7%.

America loves a comeback story and has a penchant for forgiving transgressions when brands seek redemption. But Abercrombie & Fitch is a wakeup call for business leaders who underestimate the value of being a corporate citizen when building their brands.

The fact the company is breaking records in arguably the most challenging retail environment in the history of commerce is a testament to either the public’s short memory, the brand’s remarkable comeback or both.

SWOT Report is now Business Intelligence Weekly. The creator and journalist behind the digital publication, Andrew Ellenberg, is President & Managing Partner of Rise Integrated, an innovative studio that creates, produces, and distributes original multimedia content across digital touchpoints. To submit story ideas or ask about custom multimedia publishing, call 816-506-1257, email [email protected], or read more of his work in Forbes. To learn about his company check out this profile story.