Abercrombie gross sales surge as Nineties revival spreads | EUROtoday

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It is not only types from the Nineties which are making a comeback. One of the last decade’s greatest manufacturers is just too.

Abercrombie & Fitch seems on monitor for a second 12 months of double digit gross sales progress – its first such streak in additional than a decade.

The firm, which additionally owns Hollister, has informed buyers it expects gross sales this 12 months to rise 10% from 2023.

That is almost double its prior forecast, and comes after a 16% surge final 12 months.

Known within the 90s for interesting to teenagers, and notorious for its shirtless fashions, the corporate is now going after grown-ups with wedding-wear, work applicable choices and extensive leg, saggy denims.

It has additionally taken a extra inclusive strategy, introducing a wider vary of sizes, amongst different steps – a not insignificant shift for an organization whose former chief government, Mike Jeffries, as soon as famously declared “a lot of people don’t belong” in the firm’s clothing.

Abercrombie in 2004 agreed to pay $50m (£39m) to settle claims that its hiring practices had discriminated against minorities and women.

Mr Jefferies also faced claims he had sexually exploited and abused men at events he hosted around the world and that he ran a sex trafficking ring, which he has denied.

Abercrombie, which Mr Jeffries left as boss in 2014, has since succeeded in reinventing itself, and appears to carry very little baggage from that time, said Neil Saunders, managing director at GlobalData.

The turnaround sent shares in the firm, which has more than 750 stores globally, surging from around $25 (£19) a piece at the start of 2023 to more than $189 (£147) on Thursday.

“I do not assume I’ve ever seen a model come again from the lifeless this quick,” Jonah Lupton, chief executive at Lupton Capital wrote on social mediaremarking on the rise.

While the spaghetti straps, bucket hats and platform shoes popular in the 90s are enjoying a fashion revival, Abercrombie’s offerings are not a repeat of the decade.

Rather, Mr Saunders said the company’s range, less sexy and with fewer logos than in the 90s, is resonating with millennial customers who want to look fresh without following the latest “leading edge” fashions.

He said the success of Abercrombie’s turnaround is unusual in retail.

“It’s fairly uncommon for an organization of Abercrombie & Fitch’s path and its rooted picture from the 90s to do a whole 180 and emerge as a really fashionable and profitable and totally different model,” he said. “We do not see it occur fairly often.”

The firm said sales jumped 22% year-on-year in the February-April period to $1bn (£787m), a quarterly record.

The growth was widespread, with revenue up 23% in the Americas and 19% in Europe, where the UK and Germany led gains.

Current Abercrombie boss Fran Horowitz, who became chief executive in 2017, said 2023 had been a defining one for the company, as its efforts to modernise its data and digital capabilities paid off.

“We entered 2024 with momentum,” she told analysts on a call to discuss the quarterly financial results.

“Our first quarter outcomes are additional proof that we’re off to a powerful begin.”

Shares jumped more than 20% after the report, despite a note of caution from chief financial officer Scott Lipesky, who warned there was “still a lot of uncertainty” about the economy.

He said that the firm’s sales could slow in the second half of the year.

Mr Saunders said some slower growth was expected after the boom of 2023, but that the firm was still outpacing the overall market and had an opportunity to grow overseas in countries such as the UK.

Ms Horowitz focused on that prospect during the quarterly update, noting a recent visit to London.

“We’re actually excited in regards to the alternative that we see there,” she mentioned.