Just thought you'd want to know . . .

[Cole Parker]

At Abercrombie & Fitch, Sex No Longer Sells

Abercrombie & Fitch’s (ANF) skin-filled ads and nightclub vibe once delighted American teenagers and infuriated parents. Today, many aren’t even paying attention. The once-edgy retailer has lost a third of its market value in the past year as it grapples with falling sales in Europe and the U.S. While Abercrombie blames the economy for its woes, brand consultants say it also has failed to change with the times.

Today’s teens are underwhelmed by the half-naked models and blaring, dimly lit stores. They’re also less inclined to wear Abercrombie’s longtime uniform of pricey denim and graphic T-shirts. “The trick for fashion brands is how to keep the core edgy and hot,” says Allen Adamson, a managing director at brand consulting firm Landor Associates.

The retailer’s signature models may soon be looking for work elsewhere.U.S. revenue at Abercrombie’s namesake stores and its Hollister chain slipped 2.5 percent in the first half of fiscal 2012, and the retailer is bracing for lower sales in the second half at stores open for more than a year. Abercrombie, which declined comment for this story, shuttered 71 U.S. stores in its most recent fiscal year, and in February said it will close another 180 through 2015. It now has 1,055 stores worldwide.

Abercrombie is counting on new customers overseas, where it opened 47 locations in its most recent fiscal year and its styles remain fresh and popular with many teens. Still, sales at non-U.S. stores open at least a year plunged 26 percent in the second quarter. Explains Martin Lindstrom, author of Buyology: Truth and Lies About Why We Buy: “The pipeline of coolness is disappearing, and once it dries up, then they will dry up.”

That’s quite a reversal for 68-year-old Chief Executive Officer Mike Jeffries, who took over in 1992 and turned a company that originally made safari and camping gear for Theodore Roosevelt and Ernest Hemingway into a teen emporium where sex meets the Ivy League. Jeffries used Abercrombie’s reputation for quality to charge more for youthful styles, recruiting all-American teens and college-age kids to model and work as salespeople. Risqué quarterly catalogs featuring young, taut bodies enraged religious groups. The formula worked from 1995 through 2008, when the company boosted annual sales more than 20-fold and net income more than 56-fold. Then the economic downturn made it hard for Abercrombie to keep selling $70 jeans when similar styles could be purchased elsewhere for $40. The result: Customers began moving on.

Today’s teens are “radically different” from other generations, including Millennials, now in their twenties, because they reject uniforms, says Marcie Merriman, founder of retail and brand strategy consulting firm PrimalGrowth. They have a bevy of options thanks to the boom in fast fashion from Forever 21 and Hennes & Mauritz’s H&M, and they’ve developed a more individual style from exposure to fashion via the Web and social media, says Merriman, former director of brand planning and strategy forLimited Brands’ (LTD) Victoria’s Secret. Abercrombie is “positioned well to take advantage of this group’s desire to be rebellious and indie and different, because that’s what the brand is about,” she says. “But right now the product mix doesn’t communicate that or facilitate it.”

Lower-priced rival American Eagle Outfitters (AEO), which logged comparable-store and online sales growth of 9 percent in its second quarter and 17 percent in its first, is scoring with such mainstream fashion items as camisoles with Peter Pan collars and pleated chiffon blouses. Meanwhile, Abercrombie continues to focus heavily on its old standbys, such as $30 T-shirts. “Abercrombie is still running an offense which is a huge banner of a bare-chested guy with a cute girl who’s not wearing enough clothing,” says David Maddocks, a former chief marketing officer for Nike’s (NKE) Converse label who now runs a brand consulting firm. “It’s vacuous, there’s no core idea there anymore.”

So far, Abercrombie’s woes at home haven’t hurt its popularity in untapped markets. Its Hong Kong flagship, which opened in August, logged more than $1 million in sales in its first five days. Abercrombie is considering more locations in China and the Middle East. Still, in a hyperconnected world, it won’t take long for the brand’s fading cool to catch up with shoppers in Dubai and Shanghai, says Lindstrom.

The bottom line: Retailer Abercrombie & Fitch, whose scantily clad models don’t draw teens like they used to, will close 180 stores through 2015.

[The Pecman]

Very interesting. I tried to buy a dress shirt and a tie in Abercrombie & Fitch a couple of years ago, and I was almost knocked out of the store by the 120dB loud music blaring out of the speakers in there. You literally had to shout to be heard in normal conversation.

The surroundings were very stylish, and the clothes were nice (albeit not cheap), but I skeedaddled and bought my clothes at a boring, quiet store a few doors down. No hot guy posters on the wall there, sadly.

[DesDownunder]

It's sad when the hottest man in a clothing store designed to appeal to the young, is their father.

[Lugnutz]

I follow no trends. I be me and people think it's different.