SWOT ANALYSIS ON ABERCROMBIE & FITCH
Abercrombie & Fitch (A&F) is an American retailer, currently headed by chairman and CEO Michael S. Jeffries. A&F focuses on casual wear for consumers ages of 18 through 22. With over 300 locations in the United States, the brand has embarked on international expansion throughout various world markets. The company also operates three off-shoot brands: Abercrombie (children swear), Hollister Co., and Gilly Hicks. The company also operated a post-grad brand, Ruehl No.925, that was shuttered in early 2010.
Founded in 1892 in Manhattan by David T. Abercrombie, A&F had been an elite outfitter of sporting and excursion goods. It struggled financially from the late 1960s until it was purchased by The Limited in 1988 and repositioned, under the management of Mike Jeffries, as the inspirational "Casual Luxury" lifestyle brand in present form.
Especially since 1997, the company has consistently kept a high-profile in the public eye - both positive and negative - due to its type of advertising (including its own film and magazines), its philanthropy, and its involvement in legal conflicts over branding, clothing style and employment practices.
SWOT ANALYSIS ON ABERCROMBIE & FITCH:
Strengths:
- Solid financial position
- Good quality clothing
- Good looking employers
- Loyalty to customers and clothing
- Effective marketing strategy
- Strong market position
- Good reputation - brand recognised
- Committed stockholders
- Strong brand portfolio
- Strong financial performance
- Robust balance sheet
Weaknesses:
- Controversial marketing strategy--pictures are too provocative
- Non-committed employees
- High cost structure
- Over priced
- Limited customer base (ie too narrowly focused)
- Stores are overcrowded
- Poor lighting in stores
- Loud music in stores
- Anti-American culture
- Low inventory turnover ratio
- Limited geographic reach
Opportunities:
- Online-commerce business
- Create discount stores
- Emerging markets growth for new customer types
- Expand product/service lines
- Expand internationally outside US/Europe core
- Expand limited store outlets
- Jobs
- Expansion in new markets
- Investment in infrastructure
- Development of new concepts
- Increasing online sales
Threats:
- Competition from other apparel players at the low & high end of the spectrum (i.e., GAP, J.Crew)
- Cyclical economic changes
- Economic slowdown
- Rising costs of raw materials, commodity prices
- Change in consumer preferences
- More competitors arrive in the retail industry
- Counterfeit goods
- Increasing rental rates in US
- Slowdown in the US economy