One of the hottest brands on Wall Street is…Abercrombie & Fitch?
The mall brand, which has contended with a #MeToo reckoning, the ongoing slow death of the mall, and the rise of fast fashion, among other challenges, saw its best annual stock performance ever last year.
Though Abercrombie hasn’t been part of the S&P 500 for more than a decade, its nearly 300% climb did beat every other stock in the more inclusive S&P 1500 index, including AI darling Nvidia.
To cap it off, on Monday (Jan. 8), the company announced that its fourth quarter went even better than it had previously thought.
“The Abercrombie & Fitch women’s business is expected to achieve its highest-ever fourth quarter sales complemented by an acceleration in men’s growth,” the company told investors in a news release.
Winning hearts and minds
The turnaround came on two fronts. One one hand, investors have loved how the company has hewed to the growth plan it announced in 2022, when it said it aimed to hit $5 billion a year in sales by 2025. It’s on pace to book a bit more than $4 billion for 2023, up from $3.7 billion the previous year. A&F closed a bunch of stores and replaced them with smaller ones, overhauled its inventories, and used its clean slate to lock in with Gen Z shoppers, whom it hopes will turn to it not just for hoodies and jeans but office clothes, too.
“I joined the company in 2014 and it was a really tough time for both brands,” said CEO Fran Horowitz, who worked her way up to the top post from the brand presidency at the Hollister subsidiary, at a November conference put on by fashion industry publication WWD. “The brand health was declining tremendously. The business was double-digit down. It was going to be a true opportunity to brand build and bring it back. I just felt they were two iconic brands that deserved to live again.”
On the other hand, the company has worked hard to soften its image from what used to be a too-cool-for-school brand that shunned people who didn’t fit into its thin, preppy image. Those days, highlighted in the documentary White Hot: The Rise & Fall of Abercrombie & Fitch, not only turned off a lot of customers, they also created a corporate culture that resulted in a $40 million settlement after employees sued for discrimination. (A&F didn’t admit guilt as part of that deal.) Now it’s more welcoming of customers from other walks of life.
Maria Castellanos, half of the TikTok duo (and Abercrombie collaborators) Style, Not Size, told Teen Vogue in 2021 that the company’s about-face was refreshing. “It’s mind-blowing how much more of you you can show when brands aren’t the ones judging and how much society changes when they aren’t being told by the industry what is beauty,” she said.
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