Abercrombie sales are rising as the 1990s revival spreads

Image source, Getty Images

Image caption, Abercrombie & Fitch’s new market works for millennials

  • Author, Natalie Sherman
  • Role, BBC news

It’s not just styles from the nineties that are making a comeback. One of the biggest brands of the decade is too.

Abercrombie & Fitch appears on track for a second year of double-digit sales growth – the first time in more than a decade.

The company, which also owns Hollister, told investors it expects sales to rise 10% this year compared to 2023.

That’s almost double the previous forecast, and comes after a 16% increase last year.

In the 1990s, the company was known for its appeal to teenagers and infamous for its shirtless models. Now the company is targeting adults with wedding clothes, suitable job offers and loose, baggy jeans.

It has also taken a more inclusive approach, including introducing a wider range of company sizes – a not insignificant change for a company whose former CEO, Mike Jeffries, once famously declared that “a lot of people don’t belong” in the corporate attire.

‘Back from the dead’

Abercrombie agreed in 2004 to pay $50 million (£39 million) to settle claims that its hiring practices had discriminated against minorities and women.

Mr Jefferies also faced claims that he sexually exploited and abused men at events he hosted around the world and that he ran a sex trafficking ring, which he has denied.

Abercrombie, which Mr Jeffries left as boss in 2014, has since managed to reinvent itself and appears to have carried very little baggage from that time, says Neil Saunders, managing director at GlobalData.

The turnaround sent shares of the company, which has more than 750 stores worldwide, soaring from around $25 (£19) each in early 2023 to more than $189 (£147) on Thursday.

“I don’t think I’ve ever seen a brand rise from the dead so quickly,” Jonah Lupton, CEO of Lupton Capital, wrote on social media, noting the rise.

Image source, Getty Images

Image caption, The company has moved away from the sexualized marketing it once used

While the spaghetti straps, bucket hats and platform shoes that were popular in the ’90s are experiencing a fashion revival, Abercrombie’s offerings are not a repeat of the decade.

Mr Saunders previously said the company’s range, which is less sexy and features fewer logos than in the 1990s, resonates with millennial customers who want to look fresh without following the latest cutting edge fashion.

He said the success of Abercrombie’s turnaround is unusual in retail.

“It’s quite rare that a company with the direction of Abercrombie & Fitch and the established image of the 1990s does a complete 180 and emerges as a very modern, successful and different brand,” he said. “We don’t see it happen very often.”

The company said sales rose 22% year-on-year to $1 billion (£787 million) in the February-April period, a quarterly record.

Growth was widespread, with sales up 23% in America and 19% in Europe, where Britain and Germany posted the biggest gains.

Current Abercrombie boss Fran Horowitz, who became CEO in 2017, said 2023 was a defining year for the company as efforts to modernize its data and digital capabilities paid off.

“We entered 2024 with momentum,” she told analysts on a call to discuss quarterly financial results.

“Our first quarter results are further evidence that we are off to a strong start.”

Shares rose more than 20% after the report, despite a warning from Chief Financial Officer Scott Lipesky, who warned there was “still a lot of uncertainty” about the economy.

He said the company’s sales could slow in the second half of the year.

Mr Saunders said slower growth was expected after the 2023 boom, but the company was still outperforming the overall market and had the opportunity to grow abroad in countries such as Britain.

Ms. Horowitz focused on that prospect during the quarterly update, noting a recent visit to London.

“We’re very excited about the opportunity we see there,” she said.

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