Abercrombie & Fitch's Rebranding is Paying Off

The "All-American" fashion company is starting to see results.

If you walked into a mall anytime during the 1990s and 2000s, you probably saw Abercrombie & Fitch  (ANF) - Get Free Report. 

The company had been around since the late 1800s, starting as a sporting goods store. But it became particularly famous for its preppy, "All-American" aesthetic leading up to and after the turn of the millennium. Stores were dark, reeked of cologne, and featured giant wall art of thin, muscular models glowering down at shoppers.

The company was famous for its exclusivity, offering its signature, heavily-branded clothing in a limited number of smaller sizes. Employees were distant and beautiful, and basic clothing items stitched with the company's tiny moose logo came at a premium price.

In 2006, Abercrombie & Fitch then-CEO Mike Jeffries explicitly said of the company, “We go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. Are we exclusionary? Absolutely.”

Of course, in the end, the All-American company's structure wasn't a popped-collar paradise. The 2022 Netflix documentary "White Hot: The Rise & Fall of Abercrombie & Fitch" pulled back the curtain on Abercrombie & Fitch's company culture during that era, including the mistreatment of employees of color.

Today, it's been nearly two decades since the clothing company reached its 2007 height in profit and popularity. Now, the same millennials who wouldn't (or couldn't) buy clothes from the exclusionary brand are actually shopping at Abercrombie & Fitch today.

Abercrombie & Fitch's New Look Brings in Shoppers

Since its notorious heyday in the early 2000s, Abercrombie & Fitch has employed various strategies intended to change the public's perception of its brand. Shirts and clothing items from the store no longer boast the company's logo or brand name the way they did back in the day. Instead, the brand has put more focus on increasing the quality of its products--and has scrapped its previously-limited sizing offerings in favor of more inclusive styles and sizes. 

On Monday, the retailer announced that it is increasing its fourth-quarter sales and operating margin outlooks after seeing better-than-expected sales for the holiday season. Current CEO Fran Horowitz said of the company's progress, “I am pleased with our quarter-to-date performance. Our brands performed well during the peak holiday selling period, delivering sequential sales trend improvement from third-quarter levels, leading us to increase our fourth-quarter sales and operating margin outlook."

Retailers Won the 2022 Holiday Season

Abercrombie & Fitch isn't the only retailer that saw better-than-anticipated sales during the holiday season. Another early 2000s brand favorite with staying power, American Eagle Outfitters  (AEO) - Get Free Report posted its second-highest holiday sales period in the company’s history, thanks likely in part to its clever, GenZ-focused marketing campaign on Snapchat  (SNAP) - Get Free Report. 

Shopping malls in general saw a flurry of foot traffic starting on Black Friday and continuing into the holiday shopping season. Some reports indicate that clothing sales, in general, have been on the decline thanks to inflation, pushing many shoppers to buy their fashion luxuries secondhand. For Abercrombie & Fitch, shifting to better-made products at more competitive price points could be the key to the company's continued relevance in the retail market.