That evidently is the thought behind Abercrombie & Fitch Co.’s announcement Thursday that it plans to turn its Hollister retail brand into a fast fashion retailer.
The change comes as Abercrombie is struggling to regain its footing in the highly competitive teen retail market where it has seen its market share—not to mention sales and share price—fall as fast fashion retailers such as H&M, Forever 21 and others scoop up more business.
Recently appointed Chairman Arthur Martinez said the company is exploring the shift for Hollister and is working with West Coast vendors to come up with “a supply chain that’s fast and responsive.”
New President(s) Sought
Hollister, which has a Southern California-style vibe, has some 600 stores worldwide. A shift in the merchandise is likely to mean lower prices in hopes of luring back younger, college-age shoppers who have fled to other teen retailers that offer lower prices.
It also might help turnaround Hollister. For the year ended Feb. 1, Hollister pulled in $2.1 billion in sales, roughly half the company’s total. But its comparable store sales have been dismal, falling 14%–worse than the 10% drop at Abercrombie & Fitch.
The company also is looking for a president for its Hollister brand, seeking someone with fast-fashion experience.
Abercrombie & Fifth has been under pressure to revitalize its business. Activist investor Engaged Capital LLC, which has a 0.5% stake in the company, has had new directors appointed and urged CEO Mike Jeffries to leave.
Jeffries was removed as chairman in January when Martinez, a former chief executive at Sears Holdings, was appointed.
The retailer is searching for two new presidents to run its Abercrombie and Hollister brands, either could eventually succeed Jeffries. Martinez said he would meet finalists for both posts “since we are applying succession capability to the criteria” for the selection.
Herbert Mines Associates Inc. is handling both searches.