Abercrombie & Fitch has had a rough year, while rival teen retailers American Eagle and Aeropostale are doing great.
The latest sign of trouble at Abercrombie is that stores are heavily discounting merchandise, Sterne Agee analyst Margaret Whitfield said in a note to clients.
Meanwhile, Aeropostale and American Eagle both had great back to school seasons.
Analysts have cited a few reasons why Abercrombie continues to struggle, while the competition does well.
They are:
- Abercrombie's preppy style isn't on-trend. While American Eagle and Aeropostale have been more flexible with the fickle teen audience, Abercrombie stuck to its brand values. That means poor sales in a less preppy cycle.
- While Aeropostale and American Eagle stuck to the lucrative U.S. markets, Abercrombie focused on a huge international expansion. When stores in Europe didn't perform very well, Abercrombie suffered.
- Abercrombie failed to change its image with the times. Today's young people don't like uniforms and want an edgier message from their retailer.
Abercrombie has slowed its international expansion. Maybe its brand loyalty will come in handy when preppy comes back in style.
But until then, Abercrombie's graphic T's are on clearance.
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