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Abercrombie Fitch Co is on a high.
In March, the American retailer — owner of Abercrombie Fitch and Hollister brands — reported a 16 per cent year-on-year rise in full-year revenue to $4.28 billion, following its fifth consecutive quarter of growth. Fourth-quarter sales were up 21 per cent. “2023 was a defining year for us,” says CEO Fran Horowitz, who has steered the group’s big turnaround.
Horowitz stepped into the role in 2017 (after joining the company in 2014 as president of Hollister). “When I joined, I realised we had a whole lot of work to do,” she says.
It’s a rebound not many saw coming. The turnaround — and Horowitz’s appointment — follows a late-2010s slump (2017’s $3.49 billion was the lowest yearly revenue since 2010), made worse by a string of allegations by ex-employees about the retailer’s work culture. The 2022 Netflix documentary White Hot: The Rise Fall of Abercrombie Fitch detailed a culture of racism and discrimination. (Abercrombie Fitch released a statement saying that such “actions, behaviours and decisions would not be permitted or tolerated at the company now”.) In 2023, former CEO Mike Jeffries — who resigned in 2014 amid a prolonged slump in its performance — faced allegations of sexual misconduct (he did not respond publicly at the time).
The company had also gained a reputation for being exclusionary, with sizing that maxed out at a US L. In a 2006 interview with Salon magazine, Jeffries said: “We want to market to cool, good-looking people. We don’t market to anyone other than that,” and “Are we exclusionary? Absolutely.” Despite backlash, he stuck by his words in 2013 to the LA Times.
Now, the brand is striving to move on from past controversies, internally and publicly. Upon stepping into the CEO role, Horowitz faced what she calls stage one of Abercrombie’s transformation: “How do we get ourselves out of the spiral that we were in?”
She describes a culture of top-down management, which, she says, she shifted early on. “My strategy is to listen to the associates. Good ideas come from everywhere.” Horowitz created a playbook alongside CFO Scott Lipesky, which the pair reviewed quarterly, that touches on all aspects of the business, guided by consumer research around product and branding. There was brand affinity across both Abercrombie and Hollister, she says, but they needed distinctive identities with a new, more inclusive spin.
Changing up its product design was core to that. Abercrombie once leaned heavily into its moose logo and slogan tees, didn’t carry products in black, and adhered closely to the 2000s prepster aesthetic — even after that trend waned. Now, you’ll find a much more-of-the-moment variety. The logo is gone, black is in and more sizes are available via its Curve line that goes up to a 37 jean and XXXL (previously, sizes maxed out at L). Also gone are the overly perfumed stores and shirtless men.
The Abercrombie customer is now north of 20, and in March, the brand fleshed out a Bridal edit, perfect for wedding guest attire. (Hollister, meanwhile, has taken the position of a teen brand.)
“The world shifted so significantly in the mid-[2010s] to the consumer not wanting to be told what to do — but to have their own opinion and be their own individual person,” Horowitz says.
Young millennials have been the key driver. “We saw a lot of white space out there,” Horowitz says of Abercrombie’s decision to age up. “There wasn’t really a loyal brand for this ‘young millennial’. We got to work on the product, the consumer and understanding their lifestyle.”
Analysts are impressed. Lightspeed VP Evan Berryman called it an “astonishing comeback”. Shares have been on the up since 2022, soaring 500 per cent. “If you consider where the brand was some years back and its problematic recent history, the fact it is now one of the fastest-growing apparel retailers is little short of remarkable,” says Neil Saunders, managing director and retail analyst at Globaldata.
Horowitz has steered the impossible U-turn. But now, investors are concerned about whether or not Abercrombie can maintain this momentum, particularly given its repeated emphasis on the young millennial consumer. Morgan Stanley analyst Alex Straton said in a note that profitability expectations might be overly optimistic, due to wavering consumer spend and rocky retail trends. Abercrombie may have won over this generation, but can it maintain momentum as its customers age and spend remains unsteady?
Beyond the ‘young millennial’
The Abercrombie brand revitalisation was predicated on the young millennial lifestyle, which centres around the ‘long weekend’. “We created a 96-hour calendar for the long weekend and talked about all the events that went on during that period,” explains Horowitz. Think dinners and drinks; bachelorettes and weddings; workout classes with friends and weekends away. “Abercrombie now caters to all of these different sets,” she says.
Through this, Abercrombie hopes to capture the next generation. “We have to make sure that the merchants, the designers and the marketers are focused on this mid to late 20-year-old,” Horowitz says. “That is the white space and the sweet spot because they are the ones who are still fairly single, living their best lives and enjoying their friends.”
It’s proved successful, however investors are now flagging concerns about an overreliance on this group. Generations are evolving — those who fit the category at the beginning of the rebrand are getting older, and now Gen Z is working their way into Abercrombie. “You can’t age your product up as your consumer starts to age because you’ll end up being obsolete,” acknowledges Horowitz.
Abercrombie has recaptured old and would-have-been shoppers. It’s not just people who shopped Abercrombie in its heyday, the CEO says — it’s those that couldn’t (due to limited sizing) and wouldn’t (because they didn’t identify with the old brand). The 2019 launch of Abercrombie’s Curve Love jeans marked a turning point, Horowitz says. “Curve is not anything the brand stood for in the past. It now makes up almost half of our women’s denim business.”
Once Abercrombie established consumer trust with its Curve Love jeans, it expanded this approach to dresses. The next step, Horowitz says, is occasions (this is where the bridal launch fits in, while building trust as a brand that can do formalwear).
Careful growth
Abercrombie won’t continue to grow at the rate it did last year, Saunders says — and the market shouldn’t expect it to. Managing investor expectations will be key, he says. “Wall Street is not always realistic about the degree to which brands can keep growing, so this will be something the company has to face if the growth rate slows down.”
That said, Saunders expects the company to continue to gain market share. “One of the reasons for this is that the brands are still attracting new shoppers and persuading existing shoppers to spend more.” This includes an international audience. Through 2026, the focus is global growth, Horowitz says: “We have a tremendous opportunity outside of North America.”
Abercrombie will have to work to keep shoppers’ spend, Rachel Wolff, retail and e-commerce analyst at Emarketer, flags. “At this point, the biggest potential drag on Abercrombie’s growth is the possibility that consumers will cut spending in response to sticky inflation and other economic concerns,” Wolff says. But, she notes, Abercrombie’s continued outperformance relative to the rest of the apparel sector is a sign of the strength of its corporate playbook.
Hollister is one to keep an eye on, Wolff adds, as it too is in the midst of a comeback. This involves diversification outside of denim to reduce the brand’s overreliance, Horowitz says. She adds that the focus this year is on the menswear business.
The goal is now to maintain — and build on — Abercrombie’s appeal. It hit its 2025 $4.1 – $4.3 billion sales target two years early. “With the way that we are running the business today, 2024 and 2025 are really about proving sustainability, profitability and continued growth,” says Horowitz.
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