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Abercrombie's Rebranding Efforts Might Be Working

Sales are still dropping, but according to execs, they've been sinking less over the last few months.
An Abercrombie & Fitch opening in Shanghai in 2014. Photo: Kevin Lee/Getty Images

An Abercrombie & Fitch opening in Shanghai in 2014. Photo: Kevin Lee/Getty Images

Earlier this spring, the new management team at Abercrombie & Fitch laid out some very specific plans to rework its brands in an effort to improve dismal sales. "Sexualized marketing," including having shirtless guys hang out at store openings, would be gone by July. Its dark, loud, heavily scented stores would become brighter, softer and more inviting — not just to customers, but also to employees, who no longer have to deal with restrictive hairstyle and dress codes.

Some of those changes are already in place: On a Thursday morning webcast, the executive team says that the first fully redesigned Hollister store is now open at the Polaris Fashion Place in Columbus, Ohio. Four more stores will be converted over the coming week, and the company has been putting a lot of work into revamping the product and store merchandising as well.

It's just going to take some time to see the effects of Abercrombie's overhaul. During the first quarter of the year, which ended May 2, sales for stores that have been around a full year declined by 8 percent to $709 million.

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The heartening news is that as the company has begun to enact its rebranding initiatives, it did see sales improve throughout the quarter, especially at Hollister. Executive Chairman Arthur Martinez, who has been leading daily operations since former CEO Michael Jeffries stepped down in December, says sales have continued to get better this month, too. 

While improving the customer experience at Abercrombie and Hollister is a necessary and overdue effort, the executive team knows that at the end of the day its ability to pull off a turnaround comes down to the clothes. 

"Customer perception will only change when we improve the product lines and product assortment," Martinez says.