Abercrombie and Fitch might actually be pulling off its comeback

Abercrombie & Fitch is finally beginning to see results from the revamped identity it cultivated over the last year.

Following nearly four years of dipping sales, Abercrombie embarked upon a multi-part restructuring strategy designed to win back consumers that had grown weary of the brand. The company started by launching a new campaign style that moved away from the scantily clad, thin, white models it was known for, and instead embraced diversity across race and size. Reflecting its new inclusivity approach, Abercrombie launched its first unisex collection in November, taking a cue from the rise of the gender neutrality fashion movement. Now Abercrombie is looking beyond brick-and-mortar and investing in mobile initiatives designed to get consumers shopping through its e-commerce channels, and the efforts are paying off.

As part of the updated sales projections in advance of the March 7 earnings call, comparable sales are now anticipated to grow by rates in the high-single digits, originally estimated to be in the low-single digits. The company also expects to see net positive sales up in the low-teens, rather than the mid- to high-single digits.

Thanks to this “demonstrable progress,”  executive chairman Arthur Martinez announced his retirement in a statement.

“We have built a first-rate team, whose intense focus on the customer, the revitalization of our brands, and close management of expenses to help direct resources to omnichannel and marketing have enabled us to deliver sequential comparable sales improvement,” Martinez, who also led the rebound of Sears in the 1990s, said in a statement. His successor will be Terry Burman, a current member of Abercrombie’s board of directors.

The brand’s recovery is in large part thanks to a strategic leadership overhaul, which included the appointment of Fran Horowitz to CEO early last year. Horowitz, who was formerly Abercrombie’s head of merchandising, was tasked with rebuilding the brand’s reputation, following its notoriously hyper-sexual marketing campaigns and a slew of controversial body shaming and classist statements made by former CEO Mike Jeffries.

A recent Abercrombie & Fitch promotional Instagram, showing diversity in race and size 

Shortly after Horowitz joined, the company launched its Made for You campaign, which depicted normal teenagers hanging out in cities with rising cool factors, including Memphis, Tempe and Austin. (The effort came five months after Abercrombie completely wiped its Instagram history, taking a cue from brands like Yves Saint Laurent and DKNY, to start with a clean slate.) By using non-models selected from an open Instagram contest, the intention was to project a more inclusive brand identity. At the same time, Abercrombie shifted its design to include less form-fitting clothing and slightly expanded sizing, increasing pants sizes to 14.

Rachel Saunders, insights and strategy director at Cassandra, said Abercrombie’s success is also a result of shifting focus to social and e-commerce efforts in order to better engage with younger consumers. According to a Cassandra study, Gen Z consumers are 42 percent more likely to prefer shopping online or on mobile, compared to the rest of the population at 33 percent.

“Abercrombie & Fitch is still digging itself out of a hole with Gen Z consumers,” Saunders said. “The company’s recent boost may have less to do with its attempts to shed its hyper-sexualized and overly branded image, than its direct-to-consumer growth strategy. Influential Gen Zs are significantly more likely than the general population of Zs to prefer shopping via mobile or online, so the director-to-consumer focus is a shrewd move on their part.”

The company’s improved results have also been aided by its Hollister brand. With Hollister, the company has also worked to tone down the sexual undertones of previous advertising, plus it’s found success in revitalized lingerie line, Gilly Hicks.

“We are pleased by our performance across all brands and channels during the holiday season, with continued strength at Hollister and the Abercrombie brand on track to deliver positive comparable sales for the quarter,” Horowitz said in a statement. “Our customers remain at the center of all we do, and that singular focus has continued to drive both our brands forward.”

Image courtesy of Abercrombie & Fitch

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