Abercrombie sales rise as 1990s revival spreads

It’s not just styles from the 1990s that are making a comeback. So is one of the biggest brands of the decade.

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

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

That’s almost double the previous forecast, and follows a 16% rise last year.

Known in the ’90s for attracting teens and infamous for its shirtless models, the company is now targeting adults with wedding wear, work-appropriate offerings and baggy, baggy jeans.

It has also taken a more inclusive approach, introducing, among other measures, a wider range of sizes – a significant change for a company whose former chief executive, Mike Jeffries, once said that “a lot of people don’t ‘have no place’ in the sector. company clothing.

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

Mr Jefferies has also been accused of sexually exploiting and abusing men at events he hosted around the world and of running a sex trafficking ring, which he has denied.

Abercrombie, which Mr. Jeffries left as boss in 2014, has since successfully reinvented itself and appears to carry very little baggage from that era, said Neil Saunders, chief executive of GlobalData.

The rally has sent shares of the company, which has more than 750 stores worldwide, soaring from around $25 (£19) apiece at the start of 2023 to more than $189 (£147) on Thursday.

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

While the skinny straps, bucket hats, and platform shoes popular in the ’90s are enjoying a fashion resurgence, Abercrombie’s offerings aren’t a repeat of the decade.

Instead, Mr. Saunders said the company’s line, less sexy and with fewer logos than in the ’90s, resonates with millennial customers who want to look fresh without following the latest “edgy” fashions. “.

He said Abercrombie’s successful turnaround was unusual in the retail industry.

“It’s quite rare that a company like Abercrombie & Fitch and its 90s-rooted image does a complete 180 and emerges as a very modern, successful and different brand,” he said. “We don’t see this happen very often.”

The company said its sales jumped 22% year-on-year in the February-April period to $1bn (£787m), a quarterly record.

Growth was broad-based, with revenue up 23% in the Americas and 19% in Europe, where the UK and Germany led the gains.

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

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

“Our first quarter results are further proof that we are off to a good start.”

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

He added that the company’s sales could slow in the second half.

Mr Saunders said slower growth was expected after the 2023 boom, but the company was still outpacing the overall market and had the opportunity to expand overseas, to countries like the Kingdom -United.

Ms. Horowitz focused on this perspective during the quarterly update, highlighting a recent visit to London.

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