Abercrombie & Fitch Essay, Research Paper
Abercrombie & Fitch
In 1892, the Abercrombie & Fitch Company began under the name of David T. Abercrombie, a small shop and factory in downtown New York City. David Abercrombie was dedicated to selling only the highest quality camping, hunting and fishing gear. His love for the outdoors inspired him to embark on the Abercrombie Company. Ezra Fitch was a successful lawyer in New York but was getting tired of his job and was ready to switch careers. Ezra Fitch s passion for the great outdoors was just as strong as David Abercrombie, and the two became good friends. In 1900 Fitch persuaded Abercrombie to let him buy into the business and become a partner. In 1904, the shop was incorporated and the name was officially changed to Abercrombie & Fitch. The two men had very different views about the direction of the company and with both men being very stubborn the partnership came to an end in 1907 when David Abercrombie resigned. Ezra Fitch was a determined innovator and A & F became the world s largest sporting goods store in 1917. Ezra Fitch retired in 1928 and the company continued to grow, but by the late 1960 s the store hit hard times and eventually went bankrupt in 1977. Oshman s Sporting Goods bought the company but business for them was poor. The Limited Inc. bought Abercrombie & Fitch in 1988. Today, Abercrombie & Fitch is an independently owned entity and A & F continues its tradition of exceptional quality, service and innovation.
Abercrombie & Fitch does not have an official mission statement. If Abercrombie & Fitch had a mission statement it would say that they are dedicated to selling only the highest-quality merchandise that compliments the casual American lifestyle and to be recognized as the retail leader at the target market of college students. Abercrombie & Fitch is where the customer can find well-made, stylish and durable goods and customer service above and beyond what is expected. Abercrombie & Fitch has been making these commitments to its customers since 1892.
Michael Jeffries was named Abercrombie & Fitch chief executive officer in February of 1992. In May of 1998, Mr. Jeffries was elected chairman of the board while maintaining his CEO position. Michael Jeffries leadership ability was evident as soon as he became the company s leader back in 1992. In a six-year period, Jeffries took A & F from a small retailer to an industrial leader with sales surpassing one billion dollars in 1998. Today s A & F sells the coolest clothes to the coolest upscale kids, and it is entirely the creation of Jeffries. In spite of A & F s rapid growth and success, Jeffries feels very strongly that Abercrombie & Fitch has unbelievable growth potential and many years of steady expansion in the future. The main stockholders in the company are one s looking for aggressive growth with an excellent outlook on growth, profitability, and financial health. Abercrombie and Fitch had 29 consecutive quarters of record profits. The CEO Michael Jeffries is not slowing down anytime soon and just launched a children s store and has another concept in the works.
The clothing retail market is extremely competitive and with other retail stores like The Gap, American Eagle Outfitters, Structure, and Pacific Sun-wear. The rivalry is strong among these established companies. Abercrombie & Fitch highly uses brand loyalty and brand recognition through continuous advertising of the company name on its products. Abercrombie & Fitch filed a lawsuit filed against American Eagle Outfitter Inc. for copying Abercrombie s clothing styles, catalog images and marketing strategy but the suit was dismissed in court. This is a good indicator on how competitive this market is. The demand conditions vary for clothing purchased from A & F and can change based on style changes, economic changes, and the brand loyalty and recognition of the customer. In this industry, the companies are interdependent because the products are similar from company to company or store to store, for that matter. The competitive action s of one company directly affects the profitability of others in the industry. Abercrombie & Fitch is a difficult company to classify into a life cycle. It is a growth company because of the nature of the clothing market. With styles always changing, the company is constantly introducing new clothing styles to meet the demand and to stay ahead of the competition. It also could be classified as a mature company because the market is very saturated and many consolidations in the industry like the Limited Inc. and The Gap Company have a large share of the market.
The competitive advantages that Abercrombie & Fitch hold in the retail clothing market include the high quality of the clothing and innovations in style of
their future products. Brand loyalty plays a big part in the growth and success of the company because people not only want to wear A & F clothes they want everyone to see the A & F name. The disadvantage that A & F has to deal with is a saturated market with many options to very similar clothing. The economy is a most important factor because if it starts to take a turn for the worst, people probably won t spend the high prices for clothing and will defect to a value retailer like Wal-Mart. The future of Abercrombie & Fitch will depend on the future of the costumer and the style of clothing the costumer is interested in and, of course, the price the costumer is willing to pay to be the coolest kids wearing the coolest clothing.