Teens are finding other ways to express their identities than by wearing designer logos — a fact that has finally hit home at Abercrombie & Fitch and its sister brand, Hollister, by way of drastically declining sales over the past few years.
“For years, logos were huge on kids clothing; many wouldn’t leave home without them,” Lester Holt reported on “NBC Nightly News” last night. “But now one big brand that teens worshipped for years is getting rid” of them.
“In the spring season we are looking to take the North American logo business to practically nothing,” CEO Michael Jeffries said in a conference call with analysts transcribed by Seeking Alpha. But it will “protect logo in international stores.”
“Once considered must-have items, products bearing logos have been broadly relegated to the discount bin as consumers clamor for merchandise that relies more on design details like ruffles or trim,” write Suzanne Kapner and Erin McCarthy in the Wall Street Journal. “Brands ranging from Louis Vuitton to Michael Kors to Coach have moved to limit their logo offerings. But logos will continue to be part of Abercrombie's business in Europe.”
Jeffries later added (in a call that featured 19 mentions of the words “logo”), “the logo business is larger in Hollister and that becomes a little more difficult to overcome than it has in A&F although we are overcoming that in both brands.”
Hollister sales were down 10% last quarter compared to the same period in 2013, reports Huffington Post’s Kim Bhasin, “as the company struggled to adapt to the changing non-logo times. The flagship brand has fared better, and Abercrombie saw only a 1% dip in sales in the past three months compared with the same period a year earlier.”
All this follows years of decline, however, including a “sales plummet” of 10% at A&F last year, Bhasin reports, which cost Jeffries his long-held chairman’s title in January.
“Abercrombie & Fitch was ‘the brand of the moment’ a decade and a half ago,” Time’s Jack Linshi writes, linking to a story from 2000 that maintained that “Gap peddles clothes, but Abercrombie & Fitch sells a technicolor teen lifestyle.” That included A&F’s newly launched, logo-emblazoned Hollister Co. line at the time. “But now, with stores like H&M and Zara turning white tees into fashionable pieces,” Linshi reports, “Abercrombie wants to win back its base.”
Or, as Jim Armitage and Maria Tadeo put it in The Independent, “as teens have found better things to spend their money on — mobile phone apps and games — so they’ve moved on to cheaper, smarter- looking clobber copied from the catwalks by the cheaper, faster-moving chains.”
“A few years ago, all the girls wore their Abercrombie and Hollister T-shirts, but now my friends don't wear them as much,” Micayla Lubka, a 20-year-old student from Wisconsin, tells the WSJ’s Kapner and McCarthy. “Logos are still OK if they are understated, like those on shirts by Vineyard Vines or Polo Ralph Lauren, she added.”
The New York Times’ Elizabeth A. Harris and Rachel Abrams were ahead of the story by a day with a piece posted Wednesday under the hed, “Plugged-In Over Preppy: Teenagers Favor Tech Over Clothes.”
“Analysts and trend-spotters agree that a major shift in teenage trends, and in teenage spending, is underway. John Morris, a retail analyst at BMO Capital Markets, says that his regular focus groups with teenagers about what trends they find most appealing often stray from clothing,” they wrote.
“You try to get them talking about what’s the next look, what they’re excited about purchasing in apparel, and the conversation always circles back to the iPhone 6,” Morris told the reporters.
(Apple, by the way, sent out a “wish we could say more” invitation to reporters yesterday for an event on Sept. 9 that most observers believe will feature the rollout of said iPhone 6, as well as, possibly, a wearable device, as CNet’s Shara Tibken reports.)
Macquarie Research analyst Liz Dunn tells Reuters that A&F’s move to drop logos is “good strategy” but “is not going to be enough to entirely turn sales.”
Its prices are still much higher “than those sold by fast fashion rivals, which have shrunk the runway-to-shelf turnover time to about a fortnight,” points out Reuters’ Ramkumar Iyer. “While a pair of women's skinny jeans from Abercrombie would set a shopper back by about $75, the same could cost less than $10 at Forever 21 or H&M, according to company websites.”
In other words, it could be clobbered by cheaper clobber.