Inside the astonishing, improbable resurrection of Abercrombie & Fitch

In a day and age where fads are cycling through faster than ever and many brands are struggling to survive, Abercrombie has executed a remarkable turnaround. The business intelligence firm Morning Consult found that Abercrombie’s favorability among millennials reached a record high in the first quarter of 2024, and it’s making gains with Gen Zers, too. Data from QuestBrand, a brand-management tool, indicates Abercrombie’s brand equity — meaning the value consumers see in a brand — has steadily improved over the past couple of years; young adults familiar with the brand were more likely to describe it as “hip,” a “good value,” and “stylish” in 2023 than they were in 2021. Investors are eating it up: Abercrombie’s stock a year ago, your returns would be better than that of almost any other stock, including the Wall Street darling Nvidia. It’s evidence that revivals are possible, albeit difficult, with the right execution.

“They reinvented themselves, and it worked,” said Janet Joseph Kloppenburg, the president of JJK Research Associates. “Can you and I think of another apparel retailer who literally reinvented themselves and then went to the moon with sales and earnings? It’s crazy.”

Abercrombie & Fitch has been around since the end of the 19th century, but if you’re reading this story, chances are you remember the late-20th-century and early-21st-century versions of the brand. It was all the rage, known for low-rise jeans, shirtless men, and dimly lit stores that all but the most confident (or just obnoxious) customers would feel awkward walking into. It had its fair share of controversies, including allegations of racism and discrimination. Eventually, like a lot of once hot brands, be it Urban Outfitters or Von Dutch, it fell out of favor. (If you’re a Gen Zer and do not know about The Thing that was Abercrombie, bless you, and also, there’s a Netflix documentary that can help.) When its longtime CEO exited the company at the end of 2014, its sales had declined for 11 consecutive quarters.

Can you and I think of another apparel retailer who literally reinvented themselves and then went to the moon with sales and earnings? It’s crazy.

The retail veteran Fran Horowitz was named CEO in 2017, and under new leadership, Abercrombie has turned things around. The company, which also owns the Hollister brand, reported net sales of $1 billion in the first quarter, a 22% jump from the year before, and it expects net sales growth of about 10% for the year. In turn, investors have fallen for Abercrombie. A year ago, the stock was trading at about $32. Now it’s above $180. Abercrombie’s shares are up nearly 100% this year alone.

“It’s a big momentum play at this point,” said Zachary Warring, an equity research analyst at CFRA Research.

As Horowitz has pointed out on earnings calls, there’s no “silver bullet” for Abercrombie’s performance — it’s been plugging along executing a playbook it set a few years ago. Abercrombie 2.0, or whatever you’d like to call it, is more inclusive and welcoming. It’s not for the scariest teens in your high school anymore but instead for adults in their 20s and 30s who want to look good and feel good and not have to think too hard about it. Abercrombie doesn’t want to be “super trendy,” a fashion analyst told Fast Company — it wants to do classic silhouettes in classic colors, though it tosses in some prints and ruffles, too.

The company has carefully mapped out what it thinks its customers want when they’re at the gym, at work, at happy hour, at a bachelorette party, on vacation, or wherever they’d be during a long weekend. It recently launched a weddings section, which has selections for guests and brides, for honeymoons and rehearsal dinners and receptions. Abercrombie has found success particularly with young women, though it’s on the up and up with men, too.

“They are living their best lives,” Horowitz told Women’s Wear Daily last year. “There’s nothing better than being a young millennial. They live for the long weekend.”

It wasn’t just that the product was good in and of itself.

Kloppenburg said Abercrombie’s success had come not just from changing up the look — clothes for all occasions, at a good price point — but from the company’s execution, which has included focusing on smaller stores and running a lean inventory.

“They were astute with inventory planning, with store payroll — and wages are up everywhere — with digital investments,” she said. “So it wasn’t just that the product was good in and of itself.”

And since any rebrand is only as good as the number of people who know about it, Abercrombie has embraced social-media platforms such as TikTok and influencer marketing.

“They sell a lot of their products through affiliates on social media, and that’s how they do a lot of their marketing now, which I don’t know how much you pay attention to that, but in terms of apparel and retail companies, they’re probably the best at it,” Warring said. “They’ve really benefited from influencers taking their products, trying it on, and obviously posting the link with it.”

Ali Grant, a partner and the chief marketing officer at the Digital Dept., an influencer-management company, told me that compared with other brands, Abercrombie tended to be less demanding about specific scripts for creators and to work with creators beyond “fashion girlies” to reach a broader set of consumers.

“They really allow for creative exploration and direction from the content creator they’ve hired, which is really rare,” she said. “They’ve made it more loose and more authentic and real, for lack of better words.”

As opposed to the Abercrombie of 20 years ago, whose logos screamed A&F, the modern Abercrombie is muted. An influencer may be shilling for Abercrombie, but it feels much more item-forward than brand-forward. The point in the early 2000s was the name; now it’s much more the clothes.

There’s no guarantee Abercrombie will be on top forever. American Eagle and Gap are starting to pull pages from the same playbook. (It’s worth noting that not everything Abercrombie is doing is entirely original, and some of its pants look a lot like Aritzia’s.) It looks as if Gap, which includes the brands Banana Republic and Old Navy, is starting to turn itself around and get cool again, too. Kloppenburg pointed out that Abercrombie’s operating margins were quite high, and if they decline or if the company starts having to discount more, that could spook investors.

“They’re selling a lot of products at full price and full margin. And they make a few mistakes, and those margins start coming down,” she said. “So when that happens, the stock will collapse.”

Still, Abercrombie has pulled off something unique. Its customers are loving it, and so are investors.

“It’s a very sound fundamental story as well right now, and it’ll be interesting to see over the next 12 to 18 months,” Warring said.

So maybe you don’t have to be some flashy tech company to get Wall Street excited, nor do you have to be some elusive brand that makes people feel excluded to be successful. It’s neat to see this kind of success story, where smart work and strong execution just … pays off.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.