The Wall Street Journal is funny.
Abercrombie and Fitsch. Down 12 percent.
Abercrombie & Fitch Co. said its sales dropped 12% in the third quarter, much more than expected, thanks to slowing mall traffic and weaker results in the latter part of the period.
All good and well, but a question.
Abercrombie has been closing stores in an effort to improve U.S. margins, is restructuring its intimate-apparel brand Gilly Hicks and recently decided to remove logos from its apparel in response to teens that increasingly prefer unmarked attire. The company said sales of heavy-logo products continued to decline.
What the hell is a shirt from Abercrombie and Fitsch without a logo?
Theory number one.
Despite a string of similarly dreary results from Target (TGT), Wal-Mart Stores (WMT), and Macy’s (M), Abercrombie Chief Executive Officer Mike Jeffries said the summer business climate was “more difficult than expected,” and he seemed baffled by the bad news. “The reasons for the weak traffic we’ve seen in the U.S. are not entirely clear,” he said on a conference call this morning. “Our best theory is that while consumers in general are feeling better about the overall economic environment, it’s less the case for the young consumer.”
It’s simple trickle-down economics. When the money doesn’t flow far enough down the socioeconomic waterfall, no one is there to buy T-shirts with porcupines on them that read: “Do I make you thorny?” Of course, it’s entirely possible that the porcupine-tee market has gone cold apart from teenage job woes. Maybe Abercrombie and its Hollister brand have simply fallen out of favor with its target demographic. So says Erik Gordon, a professor at the University of Michigan’s Ross School of Business: “One generation of customers has moved on, and the next generation doesn’t see Abercrombie as cool,” he told Reuters (TRI).
Haven’t you heard? The kids are all about “Normcore” these days!
Abercrombie’s past success was driven by brand power: selling basic attire at a big markup to teens eager to sport the A&F logo, once the ultimate symbol of cool. But teen tastes have done an about-face; logos are now shunned. In an attempt to resuscitate its brand, Abercrombie said in August it would remove logos from most of its clothing.
Can A and F sell Normcore?