Mike Jeffries is either one of the most brilliant retail leaders of our time or one of the most deluded. It depends on who you talk to - Jeffries, or anybody else. In August, for the 17th month in a row, Abercrombie & Fitch (ANF) posted a monthly same store sales loss. For the 14th month in a row that loss was in the double digits. For the (estimated) 6,739th time Jeffries has defended the value of the Abercrombie brand by reminding us all that it is "aspirational."
When announcing recently that the company will finally budge off its no-discounts stance, it seemed clear that Jeffries was not making the move willingly or wholeheartedly. After finally admitting that cost cuts were necessary to drive traffic back into the stores, Jeffries had to add, "The driving force behind our [higher] pricing has been fashion, quality and the aspirational nature of customers."
We get it. You think you've been protecting the enormous value of your superior aspirational brand.
Instead of tellng us that over and over again, I wish Jeffries would answer one question. Where exactly is the value of the Abercrombie & Fitch brand hiding?
Should we look for the value of the Abercrombie brand in its sales figures? The company's August, 2009 net sales were $313.9 million. That figure lands somewhere between its August, 2005 net sales of $287.4 million and its August, 2006 sales of $351.3 million. But it took the company nearly 250 more stores this year just to generate those greatly digressed sales numbers. If the value of the brand is reflected in its sales, then Abercrombie is giving new meaning to the "rollback" brand identity.
Should we look for the value of the Abercrombie brand in its stock? The company's stock prices this year have been some of the lowest of the decade, most closely mirroring the value that stockholders thought the company had back in 2000. If the value of the Abercrombie brand is in its shares, then it may need to go back to the 20th century to reclaim it.
Should we look for the value of the Abercrombie brand in its reputation? The company has been boycotted by Focus on the Family, Concerned Women for America, Women and Girls Foundation, National Coalition for the Protection of Children & Families, Asian-Americans, high school students, college students, parents, and more internet groups than could be listed in one blog.
Abercrombie & Fitch has also been sued for racial discrimination, harassment, and reportedly running sweat shops. It has angered and offended African-Americans, Latinos, Asians, Muslims, Christians, gymnasts, people with disabilities, West Virginians, an Ohio children's hospital, and even its own shareholders.
The brand is closely associated with sexual exploitation, racial discrimination, offensive t-shirts, shirtless store greeters, soft-porn catalogues, high prices, and low value. It is sometimes referred to as Abercostly & Fitch, and Abercrombie & Glitch.
The Abercrombie & Fitch brand most definitely has a reputation. It's generally not considered to be a positive reputation, but surprisingly, there may be brand value in its aggressively antagonistic image. Its callous condescending cool may actually match the values of its core customers. Bullies from the upper social strata who enjoy domination by intimidation come to mind. Even "mean girls" (and guys) have to wear clothes. And they're certainly not going to buy them from Target.
Most experts agree that the value of a brand is intangible, measured primarily in how it makes customers feel when they associate themselves with it. If this is true, then we can be fairly certain where the value of the Abercrombie & Fitch brand can definitely be found - in the mind of Mike Jeffries.
The 65 year-old bronzed, buff, and bleached CEO has never made it a secret that he wants to cater exclusively to the cool clique in every high school. Jeffries, then, because of his rank in the organization, gets to be the King of Cool.
So, when Jeffries stubbornly stuck to his we're-too-cool-for-discounts policy, was he staunchly protecting the status of the Abercrombie brand, or his own? Is it really that Jeffries is so afraid that people won't be excited about the brand any more, or that people won't be excited about him?
Jeffries might have been too busy counting his $72 million CEO compensation package last year to notice that nobody's particularly excited about either him or his brand these days. Americans aren't doing all that much aspiring, sex doesn't always sell, and conspicuous consumption isn't cool right now. In case you hadn't noticed.
So after spending a critical year stubbornly trying to prove that his brand was so superior to the rest of the U.S. retail industry that it wouldn't be subject to anything as mundane as global recession, Jeffries has become one of the plebian discounters. Welcome to the lame table in the cafeteria.
Abercrombie can return to protecting the fabricated value of its aspirational brand at any time it chooses, as long as it is willing to accept 2000 stock prices, 2005 sales figures, and 30% fewer subjects in their kingdom of exclusivity. Apparently that's the going price for cool these days.
Much like the teen customers who were abandoned in the past year, though, Jeffries may find that even though he's willing to pay the price that will keep him feeling superior, he can't actually afford it any more.
Jeffries said in an interview in 2006, "Are we exclusionary? Absolutely. Those companies that are in trouble are trying to target everybody: Young, old, fat, skinny. But then you become totally vanilla. You don't alienate anybody, but you don't excite anybody either."
It's easy to be cocky when you're coming off a good year. But now that Abercrombie is one of "those companies that are in trouble," there's one more question that I wish Mike Jeffries would answer.
How do you like the taste of vanilla?