1. Abercrombie & Fitch Co. Company analysis Prepared by: Olga Gnedash, Alexander Petrushin, Brent Hanson

2. Agenda • Company Overview • Business Description • History • Industry and competitors • SWOT analysis • Unique Sales strategy • Recommendations and Conclusion

3. Company Overview • Specialty retailer that sales casual apparel • Operates under 5 brands: Abercrombie & Fitch, AbercrombieKids, Hollister and RUEHL and Gilly Hicks: Sydney brands. • The company operates in the US, Canada, UK. • Operates 1039 stores worldwide (February 2008) • 80,100 employees

4. What Abercrombie and Fitch brands are you familiar with?

5. Abercrombie • Established July 1998 • 7-14-year-old age group • 170 stores in US • “Classic cool” theme • Logo Moose

6. Hollister Co. • Established July 2000 • 14-18-year-old schoolers • 455 stores in US and Canada • Theme “SoCal” • Logo Seagull

7. Abercrombie & Fitch • Established June 1892 • Targets 18-22 year-old age group • 357 stores • Theme “Casual Luxury” • Logo Moose

8. The RUEHL • Established September 2004 • Targets 22-35 year adults • Operates 22 stores • Logo French Bulldog

9. Gilly Hicks: Sydney • Established January 2008 • Operates 5 stores • Targets 18 and up • Logo Koala • Theme Australia

10. History • David T. Abercrombie established Abercrombie Co. on June 1892 • In 1904 wealthy Ezra Fitch became a co-owner • In 1909 issued and mailed 50,000 copies of 456-page catalog • In 1917 A&F became the largest retailer in NYC that sold sportswear • In 2006 A&F opened its first store in Canada, In 2007 first store in UK

11. Industry and Competitors • Retail Industry (Special Lines) • 40,000 companies operate 90,000 stores • Summarized annual revenue $130 billion • Dominance of large companies • Slowdown in spending on clothing • Labor-intensive industry, high demand for qualified and skilled sales reps • Two main sales seasons- fall (main for A&F) and spring

12. What are Abercrombie and Fitch main competitors?

13. Gap, Inc., The Target Corporation Gap, Inc., The Limited Brands American Eagle Outfitters, Inc. Benetton Group SpA Tommy Hilfiger Corporation Urban Outfitters, Inc. Wet Seal, Inc, The Aeropostale, Inc. Industry and Competitors

14. Competition

15. SWOT Analysis • Strengths • Strong brand portfolio • Strong financial performance • Robust balance sheet • Weaknesses • Low inventory turnover ratio • Limited geographic reach

16. Opportunities Expansion in new markets Investment in infrastructure Development of new concepts Increasing online sales Threats Counterfeit goods Increasing rental rates in US Slowdown in the US economy SWOT Analysis

17. Unique Sales Strategy: IMC • High integration of Marketing efforts • Recruits high energy “brand reps” largely from college campuses who dress in A&F • Issues subscription catalog – A&F Quarterly (350,000 Americans has subscribed) • Issues “magalogs”

18. Unique Sales Strategy • Emphasis on high level of service, quality, brand image • Targets Generation Y • Positioning strategy involves the use of overt sexuality advertising appeal • http://www.youtube.com/watch?v=9dqEcKcadUE&NR=1

19. Positive 18-22-year-olds Controversy surrounding its ad campaign has added allure and exclusivity 34 consecutive quarters of record sales and earnings Negative Parents Organizations Legislators “Playboy for kids” Unique Sales Strategy: Publicity

20. Unique Sales Strategy: Store Layout • comfortable armchairs designed • Large photos on the walls • extremely loud, energizing trance and dance songs • dimmed light • unique A&F’s scent in the store

21. Unique Sales Strategy: Web site • Allows to download music, e-post cards • Provide useful information, FAQ • Shop online • Watch Abercrombie TV • Create ANFMail accounts

22. Recommendations and Conclusion • Long-term recommendations • Open a discount clothing store • Invest in overseas expansion (Europe, Japan) • Short-term recommendations • Sponsor college events • Strengthen rebellion and controversy image • Emphasize on online shopping • Review the choice of magazines where A&F places ads

23. Thank You For Attention