Thursday, March 06, 2014

Abercrombie to Reposition Hollister Stores: Will it Work?

The Wall Street Journal reports today that Abercrombie and Fitch plans to reposition its Hollister chain of apparel stores.    Abercrombie has been struggling lately, after many years of success.   The flagship brand has seen a substantial drop in sales, and Hollister has experienced problems as well.  Hollister same stores sales decreased by 14% last year.  Now Abercrombie apparently plans to reposition Hollister as a "fast fashion" brand in the mold of Zara and Forever 21.  Fast fashion retailers do not place big bets on bold new cutting edge fashions.  Instead, they assess fashion trends, and they move very quickly to "follow" the hottest apparel industry developments.   Fast fashion firms do not place huge bets.  Instead, they build an agile supply chain, and as a result, they are able to cut their losses quickly on fashion misses and move to pursue trends that are more promising.  

Can Abercrombie reposition Hollister successfully?  They might be able to do so, but it will require rethinking the ENTIRE VALUE CHAIN for the company.   They will need to rethink how store operations work, the structure of the supply chain, the merchandising strategy, the way they market and price their products, etc.   Changing only one, or even just a few, of these items will not enable a successful transition to a "fast fashion" model.   Companies that have succeeded in fast fashion have rethought the entire way of doing business in the apparel retailing industry.  Abercrombie will have to do the same. 

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