The immense success of Abercrombie & Fitch's stock price since October 2022 is underrated. Ask anyone and nearly 90% of people wouldn't even know what Abercrombie's stock is outperforming Tesla and Nvidia within a 1-year span. BusinessInsider wrote an article
explaining why the brand has been able to rebound and appeal to millennials once again.
In the article
, it notes that when millennials were young, Abercrombie stores "felt more like walking into a private club than a clothing store at the mall." It was the coolest brand for youngsters at the time. Since hot shirtless dudes were greeting people coming in to shop, the brand was able to attract more female customers. Then overtime, as millennials grew older, the brand's cool-kid, preppy style clothes appealed less to them. For two decades, the brand struggled. In 2017, the company got a new CEO named Fran Horowitz and the company underwent drastic changes. Stores were revamped to look more like a traditional clothing store and they sold new types of clothes that appealed better to Gen Z. The brand now appealed to people from teens to those in their 40s (aka Gen Z and Millennials).
When BusinessInsider journalists went into an Abercrombie store, here's what they found:
- clothes were more sophisticated
- stores started selling office wear
- they offered elegant pieces for special occasions
- they had athleisure products
Note that these observations were applied to the women's clothing section and are starting to be applied to the men's clothing section. This is was due to the company's turnaround efforts being focused on women first. It wouldn't surprise me if Abercrombie becomes one of the most successful retail businesses in the 2020s. When thinking about the company getting a new CEO and seeing the returns on their turnaround efforts appear in 2023, I'm reminded that turnarounds take longer than a year and that the real returns come much later. Anytime I see a new CEO enter a company, I will keep an open mind that their turnaround efforts will bear fruit in years, not months.