One of the biggest retail disasters of the last 3 years is finally cool again

AbercrombieFacebook/Abercrombie & FitchAbercrombie models.

Abercrombie & Fitch, one of the biggest retail disasters of the last 3 years, is finally cool again.

On Tuesday, Business Insider’s retail reporter Mallory Schlossberg noted that after a tumultuous run for the company, Abercrombie’s latest fall line makes it clear the company is innovating and might actually be cool again.

Gone are the logos that defined the rise and fall of the teen brand and in are cleaner, more modern lines.

Abercrombie’s clothes, and by extension its brand, sales, and stock, could be poised for a comeback because now, if you’re wearing Abercrombie clothes, someone else won’t know you’re wearing Abercrombie.

As fashion blogger Man Repeller wrote, “What ‘the new Abercrombie’ no longer has is that recognisable-from-anywhere A&F look; no iconic silhouette for similar high street brands to emulate. That day is gone. But for a brand that once pushed away its customers by strategically making others feel excluded, this…is a smart move.”

This turnaround has been a long time coming for Abercrombie, which endured a more than 2-year-long run of declining sales that eventually led to the ouster of long-time CEO Mike Jefferies. In December 2014, Jefferies left the company after more than two decades in the CEO role. The company has still not named a replacement.

Jefferies’ departure followed 11 straight quarters of same-store-sales declines (or sales at stores open at least a year), and came about a year after he was stripped of his role as chairman. Those declines have continued in the three quarter since Jefferies’ departure.

But of course it wasn’t all bad.

During the course of Jefferies’ tenure, the company’s sales went from under $US80 million a year annually to around $US3.7 billion in the fiscal year ended January 31, 2015 (though this was down 9% from the prior year).

And Abercrombie, like many retailers, saw its share price top out before the financial crisis and endure the double-whammy of a rapidly changing retail environment and the financial crisis. But after nearly regaining its pre-crisis high, shares of the company fell more than 50% from the beginning of 2011 through the end of Jefferies’ tenure.

In 1999, the year Abercrombie’s sales topped $US1 billion for the first time, the brand was at the height of its popularity, and as Business Insider’s Hayley Peterson noted last year, the brand was canonized in one of that summer’s biggest hits, “Summer Girls” by LFO.

(Listen to this song and you’ll realise how far pop culture has come since then.)

But through the 2000’s the brand slowly struggled with its image as its usage of bold logos fell out of favour with its core teenage customer.

As Peterson also wrote, under Jefferies, Abercrombie began to, “seem like an exclusive club that bestowed its logo on thin, tan, popular teens with lots of cash to spend. The advertising, which featured frolicking, half-naked co-eds, upset many parents — which made the brand even more attractive to their kids.”

Abercrombie & Fitch Ad

Eventually, however, this marketing tactic wasn’t enough to keep in touch with its core customer. According to a Piper Jaffray survey conducted last fall, Abercrombie ranked second on a list of brands teens no longer wear.

In the second quarter, Abercrombie’s financial results still showed a company that is struggling with a sales decline, as same-store sales were down 4% in the second quarter against the prior year.

Compared to the prior quarter, however, same-store sales were up. Additionally, profit margins improved slightly, with gross margins rising 0.2% to 62.3% while adjusted margins rose 1.1% to 62% in the second quarter.

And so while it as if the company doesn’t still have major challenges ahead. (Recall that Abercrombie is still without a CEO.)

But for a brand that was continually beaten down for years, it seems like the worst might be over.

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