Abercrombie & #FitchtheHomeless

Abercrombie & Fitch’s Turmoil With Social Media & Poor Marketing Management

Case Analysis Presented By Tori Cole & Christopher Virgin

Agenda Situation Analysis – “The Quote Heard Around the World”

Timeline of Events – “The Four Weeks of Sorrows”

A&F’s Marketing Management Issues – “Perception is Reality”

Financial Performance of Abercrombie & Fitch (2008 – 2012) – “The Measure of Success”

Decision Options & Recommendations – “Facing the Giant Known as Social Media”

Situation Analysis “The Quote Heard Around the World”

"In every school there are the cool and popular kids, and then there are the not-so-cool kids," he says. "Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely.”

~Mike Jeffries, C.E.O. of Abercrombie and Fitch

Timeline of Events “Four Weeks of Sorrows”

A&F’s executives, minus Jeffries, met with the National Eating Disorder Association and America the Beautiful Teen Empowerment Series

Summer 2013

A&F’s stock price dipped nearly 40 points from the 2012 share price.

Summer 2013

A&F CEO addressed the controversy via a Facebook post.

May 15

#FitchThe Homeless campaign went viral with 4.3 million views and celebrities began dis-endorsement of the A&F label.

May 13

Jeffries’s quotes were viral on popular social media sites and sparked outrage from across the Internet.

May 9

Jeffries’s 2006 quote resurfaced in a Business Insider article.

May 3

Timeline of Events“Four Weeks of Sorrows”

May 3, 2013 – Jeffries’s 2006 quote resurfaced in a Business Insider article regarding A&F’s refusal to manufacture clothing for plus size women while producing them for larger men.

May 9, 2013 – Jeffries’s quotes were viral on popular social media sites and sparked outrage from across the Internet.

“Sizing up Abercrombie – A Letter to Mike Jeffries” by Andrea Neuser, mother of 3, published in Huffington Post

Change.org released an online petition entitled “Abercrombie & Fitch CEO Mike Jeffries: Stop telling teens they aren’t beautiful; make clothes for teens of all sizes!”

May 13, 2013 – #FitchTheHomeless campaign went viral with 4.3 million views and celebrities began dis-endorsement of the A&F label.

May 15, 2013 – Abercrombie & Fitch CEO addressed the controversy via a Facebook post.

Jeffries’s post failed to persuade the public who were already inundated with an onslaught of negativity campaigns against A&F.

Also, A&F’s history of legal battles in 2004 provided a seemingly negative testimony contrary to the brand’s pronounced opposition to discrimination and exclusivity.

Summer, 2013 – Abercrombie & Fitch’s stock price dipped nearly 40 points from the 2012 share price.

Summer, 2013 – Abercrombie & Fitch’s executives, minus Jeffries, met with cause organizations, the National Eating Disorder Association and America the Beautiful Teen Empowerment Series

Marketing Management Issues “Perception is Reality”

Lack of Socially Responsible Marketing. With Jeffries’s comments, A&F positioned itself as targeting the “All-American” consumer with beauty and social aptitude.

Jeffries’s definition of “All-American” was perceived as discriminatory and highly exclusive by the general public.

A&F’s “All-American” perception was not conducive to the 21st century American values of cultural appreciation, diversity, and inclusion.

Company tied to promotion of bullying and promoting negative body image.

Negative History of Discrimination. The public viewed A&F as discriminating employment entity that discouraged diversity in its

workforce as well as its consumer base.

Negative History of Exclusivity. The public viewed A&F as exclusive to plus-size consumers, particularly females, and a model

for encouraging bullying and further discrimination based upon body weight and physical image.

Financial Performance of Abercrombie & Fitch(2008 – 2012)Financial Attribute Net Performance

Net Sales

Gross Profit

Current Ratio

Free Cash Flow

Stockholder’s Equity

Return on Avg S. Equity 2008 2012

Decision Options and Recommendations“Facing the Giant Known as Social Media”

Recommendation: A&F should consider terminating or demoting Mr. Jefferies for his comments or at minimum prohibit interviews with the media for a period of time.

Argument/Reasoning: If A&F decides to terminate Mr Jefferies this action would help separate his comments from the company. This will also allow A&F to move forward and begin to revitalize their brand.

Recommendation: Also, the company should begin a marketing campaign that focuses on their American patriotism and humanitarian projects.

Argument/Reasoning: A&F is an American corporation that was started in America and employs thousands American citizens across that nation. Informing current and potential customer on their humanitarian efforts will help rejuvenate the A&F brand in the media. A vast majority of Americans tend to have short term memory which will allow A&F to shift the perception of their company’s image from negative to positive.

Recommendation: They should not sell larger sized clothing because that is not within their competitive advantage and does not cater to their core customer base.

Argument/Reasoning: Focusing on their core customer base has allowed A&F to obtain a competitive advantage over their competitors. A&F understands their customers, which allows A&F to effectively sale apparel that is exclusive to them.