Fran Horowitz, CEO of Abercrombie & Fitch, Rebuilds Abercrombie and Hollister by Listening Closely to the Consumer
- Oops!Something went wrong.Please try again later.
In rebuilding the Abercrombie and Hollister businesses, Fran Horowitz, chief executive officer of Abercrombie & Fitch Co., has paid careful attention to the consumers’ needs.
Speaking at the WWD Apparel & Retail CEO Summit with Jean Palmieri, WWD’s senior editor, men’s, Horowitz outlined steps she took to recapture the business, which had fallen on hard times. Horowitz joined the company in October 2014 as brand president of Hollister. A year after joining, she became president of the company and chief merchandising officer of all brands before moving into the CEO role in February 2017.
More from WWD
“I joined the company in 2014 and it was a really tough time for both brands. The brand health was declining tremendously. The business was double-digit down. It was going to be a true opportunity to brand build and bring it back. I just felt they were two iconic brands that deserved to live again,” Horowitz said.
What she encountered when she joined Hollister were associates who were filled with knowledge about the consumer and what they wanted to do, but they hadn’t had an opportunity to do it. After that, she transitioned to oversee all brands, and they were running the company through an office of the chairman. Again, she found smart, curious and optimistic employees who saw the opportunity, “but really had quite a bit of work to do.”
Prior to her arrival, Abercrombie’s stores were known for having big, beefy shirtless guys and the stores were dark and filled with the scent of fragrance. She was asked how they went about transforming the stores.
First, she went to the malls to see the competition. “The first thing I realized is that both brands [Hollister and Abercrombie] had really merged together and there wasn’t a big differentiation between the brands. And we had to make a decision, do we have one brand or two?” she said.
“We realized that Hollister could really live as a global, iconic teen brand, and there was this white space for a mid-20s, young Millennial brand that we could age up Abecrombie to,” Horowitz said.
One of the most important first things they did was previous management, then-CEO Mike Jeffries, had really focused on presentation and what she called “fitting in,” but she made sure that they were focused on “belonging.”
The true turning point for Abercrombie was figuring out what was important to that customer and what she or he wanted.
“They are living their best lives. There’s nothing better than being a young Millennial. They live for the long weekend. Monday would come along and the most important thing for them was what was happening the next weekend,” she said. They prepared a 96-hour calendar of what those consumers were doing, such as bachelor and bachelorette parties, weddings, and time away with their friends. “We can actually make sure that we clothe them for those 96 hours.…As simple as it sounds, and it was not simple, that was the turning point. That got the merchants, the designers, the marketing team all focused on what was important to them,” she said. They began to see a turn in the business in the fourth quarter of 2019.
Giving an example of what it means to listen to one’s customer, Horowitz told a story that when she first started, at Abercrombie Men’s, Hollister Teen guys and even the little Abercrombie boys’ business, every pair of jeans had a button fly. Yet they had information that said that customers liked the jeans but just not the button fly. “We listened to the customer, and started to transition the jeans, and needless to say from that point forward, the business has been just terrific.”
In addition, they became more more inclusive in size offerings. They started a franchise for their Abercrombie women’s denim called Curve Love, which now accounts for almost half of their business today.
The company also introduced YPB, an activewear line, two years ago to fill what customers said was a gap in the offering.
Switching Abercrombie’s appeal to an older customer had its challenges, however.
“It’s definitely not easy. It took time and time again. Coming up with this focus on the customer and the calendar and what they’re doing certainly helped. But what really was the key was our consumer. Once the consumer started to notice the brand again, we all know about social media, and we saw an incredible rally online that really helped people understand what was happening at the brand. TikTok was incredibly explosive for us. We made sure the product was right and then the voice and the experience, and it all came together,” she said.
In the past, Abercrombie was predominantly a men’s brand, but today it is predominantly a women’s brand, although the men’s business is catching up. “We’ve had three consecutive quarters of positive growth and we’re really excited about what we’re seeing in men’s,” she said. Some key categories are denim, outerwear, “and now dresses are terrific,” Horowitz said.
Asked what the Abercrombie culture — which had previously been very male-oriented — is like today, she said, “What I learned very quickly is the culture needs to come from the bottom to the top, and not from the top to the bottom. That was a big welcome change for everybody. I did a listening tour, I met a lot of associates, I do a lot of trips to make sure I’m staying in touch with the associates.” Through that they’ve been able to build a culture “of accountability that wasn’t there before, coupled with autonomy. I tell them all the time great ideas come from everywhere and the most important word is [work-life] balance.”
Horowitz addressed how she works with influencers and affiliates, which have become “an incredible part of our business.” She said her customers listen to their peers and their friends, more than a company. From her perspective, “the transition from influencers to affiliates has been very, very important because affiliates have a stake in the game.” They get a code and they push the product they love. Once the influencer posts, they’re kind of done and they move on.
Digital remains extremely important and is used differently by its two brands’ customers.
At present, Abercrombie has a $2 billion digital business. She said there are very different shopping patterns going on. She said the Hollister customer may start the shopping process online, but they like to go to the mall and they enjoy going shopping. That business is mid-30s percent digital. On the other hand, Abercrombie’s adult and kids business is almost 70 percent digital. She said a big part of their business is called pop-ins, which is purchase online and pick up in the store, as well as order in-store.
Abercrombie recently opened a new retail concept on Fifth Avenue, which will be rolled out throughout the fleet.
“We [total company] have been on an incredible journey the last nine years in really revamping our real estate around the world,” Horowitz said. In 2020, Abercrombie closed more than 120 stores and took a million square feet out of its fleet. “The most important opportunity we had was creating smaller, smarter and more efficient stores,” she said. She said the new Fifth Avenue store is a good example of that. They closed a much larger, 50,000-square-foot store nearby. She said the new store is much lighter and brighter. “The consumer is loving it. We opened up a new store down in SoHo, and we have a new store coming to Flatiron very soon,” she said. “We have lots of new stores around the world, and we’re finding that every time we open up a smaller store, it is more efficient, more productive and just more welcoming for the consumer.”
Looking to holiday, Horowitz said she is optimistic. “We had a very strong second quarter, and we’ll announce third quarter in a few weeks. We do a lot of testing, and reacting, so for us this year, with the supply chain being back to normal, we can actually test and react, and we’ve had a lot of learnings heading into the back half,” she said.
Horowitz was asked what challenges being a female CEO has presented, and what the industry has to do to get more women into the C-suite?
“I get asked this question quite frequently. I would like my legacy to be a successful CEO and not a female CEO because I believe that’s based on the strategy and what you’re executing. At the same time, I do understand being a role model to young women is very important, and I do a lot of mentoring,” Horowitz said.
She’d like to see more young adults enter the field of retailing. “It’s such an incredible industry. I’ve loved it from the moment I got into it. It’s just incredibly satisfying. We don’t have great PR right now. There’s not a lot of young adults that want to get into it,” she said.
Best of WWD
