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Why Abercrombie Is In Desperate Need Of Reinvention

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Abercrombie & Fitch used to be the pinnacle of high-school coolness, with people lining up to spend $90 on a logo-emblazoned hoodie.

Now they've fallen on hard times. The retailer's international expansion failed and they're shuttering stores back home. Profits were cut in HALF in the second quarter, the retailer announced today.

Abercrombie's brand recognition is incredibly strong, and almost any American could describe the way the clothes look or how the stores smell.

But their preppy signature is polarizing in a fashion cycle that embraces alternative looks. If punk, goth or grungy looks are cool, then Abercrombie decidely isn't. 

And that can be dangerous in the fickle teen market.

For instance, here's a main display from competitor American Eagle's site embracing the "geek chic" trend popularized by actress Zooey Deschanel:

american eagle

And here's a display on Abercrombie's site:

abercrombie display

The clothes look unchanged from this 2000 catalogue we saw for sale on eBay:

abercrombie

In a world where motorcycle jackets, funky glasses and skull bracelets are popular, Abercrombie can't succeed. 

John Jannuzzi at four-pins.com even wrote a "nostalgic" essay about when people used to wear Abercrombie & Fitch hoodies. At one point, Jannuzzi owned 20 of them:

"Rarely a day went by, regardless of the heat, that I didn't wear one of those guys. My Christmas money, birthday money and allowance disappeared at such alarming rates, that my father intervened. Ultimately, I was told that I was being irresponsible, which is true, and as a result was forced to begrudgingly part ways with my beloved hoodie collection. I was allowed to keep a couple before being deported from Connecticut to college."

LFO's 1999 song Summer Girls, which said "I like girls who wear Abercrombie & Fitch," and helped launch the brand, is now considered vintage.

And a quick Twitter search of Abercrombie reveals sentiments like this one:

tweet abercrombie

Is Abercrombie in desperate need of reinvention? Or should they just wait out the current fashion cycle?

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American Eagle Is Beating Every Other Teen Retailer

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American Eagle, shopping, fashionable girl, clothing, buying, purchasing

American Eagle has posted awesome results since new CEO Robert Hansen took over. 

Even as its main competitors, Aeropostale and Abercrombie & Fitch, struggled through back-to-school season, American Eagle dominated. 

The future looks bright for the retailer, according to Dorothy Lakner, an analyst at Caris & Co. The reason why American Eagle is doing so well in comparison to its competitors is obvious. 

American Eagle has the best product. 

While Abercrombie and Aeropostale stuck to their old, preppy designs, American Eagle has made an effort to differentiate its product, Lakner explains. 

She took a trip to the mall and made some observations: 

We know that AEO has a strong denim franchise and looks good in terms of its colored offering, but also for its differentiated printed jeans. As we await what we hope should be a more normal winter this year, we think AE’s sweaters are very differentiated—different fibers and knits and cool designs. This past weekend we also thought new handbags were an improvement over past efforts. And the clearance room in the back of the store was nicely cleared out.

While sales can be affected by economic factors, American Eagle is a good example that product is king. 

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Abercrombie Workers Are Protesting The Company's 'Unfair' Scheduling

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abercrombie employee

Thousands of Abercrombie & Fitch workers are petitioning against the company's "unfair" scheduling practices. 

According to a Change.org petition: 

"Bintou Kamara, a cashier at Abercrombie & Fitch’s flagship New York City store, is urging the company to stop “on-call” shift scheduling, a practice that mandates an employee be available to work despite often not being asked to work for the shift. Kamara says this makes it difficult for workers like her to make ends meet.

“We aren’t getting enough hours,” said Kamara, who started the petition on Change.org. “Abercrombie gives us more call-in shifts than regular hours. We have to be available for on-call shifts, get ready for work, and then call in with no guarantee that we’ll even work. These on-call shifts make it difficult for us to have another job, go to school, or to arrange for child care.”'

Kamara has gathered 2,000 signatures in less than a week. They're also planning a protest at the company's flagship store in New York City.

This isn't the first time that Abercrombie employees have publicly campaigned against the retailer. Abercrombie has been accused of putting too much emphasis on appearance and discriminating against people who aren't physically attractive. 

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Why Abercrombie Is Getting Creamed By Its Two Biggest Rivals (ANF, AEO, ARO)

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Abercrombie & Fitch Models In Front Of Store

Abercrombie & Fitch has had a rough year, while rival teen retailers American Eagle and Aeropostale are doing great.

The latest sign of trouble at Abercrombie is that stores are heavily discounting merchandise, Sterne Agee analyst Margaret Whitfield said in a note to clients.

Meanwhile, Aeropostale and American Eagle both had great back to school seasons.

Analysts have cited a few reasons why Abercrombie continues to struggle, while the competition does well. 

They are:

  • Abercrombie's preppy style isn't on-trend. While American Eagle and Aeropostale have been more flexible with the fickle teen audience, Abercrombie stuck to its brand values. That means poor sales in a less preppy cycle.
  • While Aeropostale and American Eagle stuck to the lucrative U.S. markets, Abercrombie focused on a huge international expansion. When stores in Europe didn't perform very well, Abercrombie suffered.
  • Abercrombie failed to change its image with the times. Today's young people don't like uniforms and want an edgier message from their retailer.

Abercrombie has slowed its international expansion. Maybe its brand loyalty will come in handy when preppy comes back in style.

But until then, Abercrombie's graphic T's are on clearance.

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How Abercrombie & Fitch Finds The Shirtless Dudes Who Stand Outside

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abercrombie models

Abercrombie & Fitch has spent decades selling apparel with shirtless men.

But Abercrombie doesn't recruit the models standing outside from an agency — the men who are hired are just normal applicants. 

One of Abercrombie's shirtless models posted on Reddit's "Ask Me Anything" section and provided insight on the process. 

The man applied for a regular retail job but was recruited to bigger things and asked to take his shirt off in the interview:

"I just kind of ended up there. I thought they could be looking to place me somewhere inside or even in the back."

Some customers have crossed the line:

"There was this one time these two ladies in their 40's came in and started smiling and whispering to each other. I felt like I was in 4th grade. Then they came up and told me what a nice smile I had and how cute I was. At first I thought it was just standard flirting, but then they started asking when I get off and what I was doing after I got off work. This went on for a good twenty minutes until my manager intervened."

The Abercrombie cologne scent permeates everything:

"People tell me I smell like the store even when I didn't work that day."

What happens when he runs into people he knows:

"The store I work at sadly isn't too far from where I live so it has happened occasionally. I get mixed reviews and lot of guys tend to have less respect for me. On the other hand girls usually see it as a plus. When I see someone I know though its usually awkward and embarrassing for me though."

Abercrombie has a paltry employee discount:

"We get 20 percent off for employees only."

The man also said how he entertains himself standing outside:

"Sometimes I like to pretend that I'm mannequin and then move to greet them. At the last second I've gotten a few people to jump."

DON'T MISS: Former American Apparel Worker Dishes On Recruiting Hot People And Partying On The Job >

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Abercrombie & Fitch CEO Michael Jeffries Had Crazy Rules For His Models

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abercrombie fitch male models hong kong

Abercrombie & Fitch CEO Michael Jeffries is known for micromanaging his chain. It's said he chooses what songs play in the stores and decides what displays will look like. 

But a new report shows how his micromanaging extended to actors and models who worked on the company jet. 

Sapna Maheshwari at Bloomberg reports some crazy details from the company's manual, which was recently disclosed in an age-discrimination suit brought by an ex-pilot:

  • The flight crew had to wear Abercrombie jeans, polo shirts, flip-flops, sweatshirts and a winter coat. 

  • Men had to wear a spritz of the retailer's cologne along with Abercrombie jeans and boxers. Flip-flops were also mandatory. 

  • Men weren't allowed to wear jewelry except for wedding rings or watches. 

  • Black gloves had to be used while handling silverware, while white gloves were worn to lay the table. 

  • The song "Take Me Home" had to play when passengers entered the cabin on return flights. 

  • Jeffries three dogs, Ruby, Trouble and Sammy, were given different seating arrangements based on who was traveling. 

  • Staff weren't allowed to "expose the toilet paper" or "fold the end square," a rule that also applied to Jeffries' home.               

With Abercrombie quickly declining in value the company is seen as a takeover target. It's hard to imagine such a controlling CEO relinquishing any of his power. 

Many analysts say that the retailer has struggled because it hasn't adapted to the fashions and times of its young customers. 

If Jeffries and the rest of management want the company to succeed, they're going to have to work on revolutionizing Abercrombie's image. 

DON'T MISS: How Abercrombie & Fitch Finds The Shirtless Dudes Who Stand Outside >

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Abercrombie CEO Mike Jeffries Just Defied All His Haters

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Mike Jeffries

For months, analysts, investors and the media have been questioning the leadership of Abercrombie CEO Mike Jeffries. 

Abercrombie was quickly declining in value and seen as a takeover target. Jeffries is a notorious micromanager, even controlling what shoes models on the private jet can wear, and it was hard to imagine such a controlling CEO being flexible enough to make it in today's challenging market. 

But today, Abercrombie reported results, and their sales, inventory and profits are better than anyone imagined. Shares are up nearly 30 percent on the news, a sign that investors are once again confident in Jeffries' leadership. 

Last month, the CEO made headlines when it emerged that he made models on the private jet wear a spritz of Abercrombie cologne and make seating arrangements for his three dogs. 

Many analysts say that the retailer has struggled because it hasn't adapted to the fast-fashion mentality of its young customers. While teen culture has changed immensely in 15 years, Abercrombie has not. 

Recent quarters were so bad that analysts began speculating that Abercrombie might be a takeover target. If a private-equity firm were to acquire Abercrombie, it seemed unlikely that such a controlling CEO would be able to adapt to appease the new guys in charge. 

But Jeffries responded to the downturn by managing expenses at Abercrombie, closing underperforming stores and cancelling construction of new ones. 

Abercrombie's inventories are also down, meaning that teens are buying their clothes. 

It looks like Jeffries finally has some vindication. Now that expenses are under control, the CEO can focus on innovating the brand. 

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15 Companies That Originally Sold Something Completely Different From What Made Them Famous

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tiffanys jewelry pearlsSome companies find their niche and stick to it. Others, though, have to adapt to changing markets in order to thrive. Here’s a look at some companies that switched industries at some point in their histories, usually for the better.

Avon once sold books.

David H. McConnell started Avon in 1886 without really meaning to. McConnell sold books door-to-door, but to lure in female customers he offered little gifts of perfume. Before long, the perfume McConnell was giving away had become more popular than the books he was selling, so he shifted focus and founded the California Perfume Company, which later became Avon.



Nokia once sold paper.

The telecom giant got its start in Finland in 1865, when Fredrik Idestam opened a pulp mill and started making paper on the banks of Tammerkoski. The company later bounced around a number of industries before getting serious about phones in the 1960s.



3M once sold minerals.

When the Minnesota Mining and Manufacturing Company’s founders opened their business in Two Harbors, Minnesota in 1902, they weren’t selling Post-It Notes. The partners originally planned to sell the mineral corundum, an important ingredient in building grinding wheels, directly to manufacturers.




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Abercrombie Just Proved To Everyone That It Is Back

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Abercrombie & Fitch advertisement

Just a few months ago, Abercrombie & Fitch was in crisis. 

Critics said that the teen retailer had stuck too close to its preppy roots and wasn't flexible enough to appeal to today's demanding teens. CEO Mike Jeffries was seen as being too controlling to compromise and turn declining sales around. 

At one point, Abercrombie was even seen as a target for private equity firms who would take over and try to improve business. 

But during Black Friday shopping, Abercrombie proved that business is booming again. 

"Abercrombie and Hollister were the clear teen winners, with spectacular lines of teens looking to take advantage of half-off deals," said Eric Beder, an analyst at Brean Murray Carret & Co. 

Teens, the top demographic this Black Friday, poured into Abercrombie stores, said Dorothy Lakner, an analyst at Caris & Co. Lines were longest in front of Abercrombie and Hollister, and the retailer has inventory under control again. 

Abercrombie reported great results last month after Jeffries closed under performing stores in Europe and sales were up on better product. 

But the Black Friday victory is just what investors have been looking for from Abercrombie because it shows that the great quarter wasn't just a fluke. 

Now that interest in Abercrombie is strong again, the brand will have to focus on innovating product and keeping its fickle consumers intrigued. 

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These Are America's Least Valuable CEOs

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 There is a nearly endless number of criteria that measure how well CEOs perform, whether they are paid fairly, and what metrics should be used for determining chief executive compensation. One yardstick that is never used but should be, is the simple ratio of market capitalization to pay. It takes into account the entire value of the company to shareholders and weighs it directly against annual compensation.

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American Eagle's Smart Tactic For Dominating The Teen Market

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American Eagle, shopping, fashionable girl, clothing, buying, purchasing

Since CEO Robert Hansen took over American Eagle last year, sales and profits have soared

American Eagle is the analyst favorite in teen retail, with earnings per share up a stunning 37 percent from a year earlier. Meanwhile, Abercrombie is just stabilizing and Aeropostale is struggling. 

The reason American Eagle is doing so well is because they're doing one thing better than anyone else in the business, according to Dorothy Lakner, an analyst at Caris & Co. 

It comes down to merchandise assortment. 

"American Eagle will deliver a strong holiday based on greater merchandise differentiation versus other teen retailers," Lakner said. "It's my favorite name in the teen sector."

American Eagle has the perfect mix of fashionable, trendy pieces and core basics. While Abercrombie and Aeropostale stick to the preppy style they've always had, American Eagle makes an effort to offer trend-right apparel and accessories. 

The merchandise difference is apparent on American Eagle's website. It advertises trendy pieces like sequined sweaters and tie-dyed jeans alongside plain denim and button-down shirts. 

The brand's "well-balanced core and fashion lifestyle assortment resulted in an increase in traffic," said Eric Beder, an analyst at Brean Capital. 

In retail, the best merchants win. For now, American Eagle is offering the best assortments to the teen audience. 

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3 US Retailers That Could Get Smacked By EuroCrisis

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Abercrombie & Fitch Ad

It’s no new news that the EuroZone is undergoing a severe reorganization –contraction, really - with reports Friday morning that “The European Central Bank now sees the euro zone economy contracting by 0.5 per cent this year, slightly worse than its original projection of 0.4 per cent,” with the new 2013 forecast for the 17-nation group showing another .3 percent contraction for next year.

While this is obviously terrible news for the recession-ravaged region, it represents a significant setback for American retailers, particularly those banking on growth in the European markets to redeem a now increasingly-bleak-looking 2013.

Look for these 3 retailers to slink further into under-performance, post-holiday season.

GAP Inc: I’ve said it before and I’ll say it again: the market’s wrong to be bullish on Gap Inc.  A temporary blip of success does not a turnaround make; the land-grab in the world of millennial fashion for retail giants is over, and instead of managing it like the growth company like it was in the ‘90s, GAP should instead be focusing on operations and sourcing more than expansion.  Instead, with European sales totaling more than 5% of overall revenue and a recently-announced increase in focus on expansion the Chinese market (which is set to experience it’s own version of contraction in its middle class in 2013), GAP’s revenues are set to take a hit next year.

Abercrombie & Fitch: Despite recent analysis that all’s well at A&F after a (relatively) successful Black Friday (and Cyber Monday), general trends for the retailer suggest a tough 2013 and beyond.  While the company“has been closing stores in an effort to improve margins in its U.S. business,” the truth is that “Abercrombie has shown weakness in recent quarters amid disappointing sales in Europe and an increase in markdowns.”  Most importantly, with sales in Europe totaling more than 30% of A&F’s 3rd quarter sales, further contraction in the region next year will hit the soft porn-styled retailer peddling $30 t-shirts in a $10 t-shirt economy.

Guess Inc.: Things have been tough for this iconic American retailer the past few years. Over-priced denim and expensive accessories have forced Guess to the Millennial sidelines as high-quality, fast-fashion Zara has usurped the retailer’s trendy pedestal. Experts note that “with the persistently weak economic conditions in the European market, Guess’ revenues are likely to be under pressure” in 2013, while the retailer’s 3rd quarter numbers show that “European revenues increased 2 percent in local currency; declined 8 percent in US dollars.”  Despite a shake up in senior management in its European division earlier this year, Guess’ “net earnings for the nine months ended October 27, 2012 were 106.2 million dollars, a decrease of 43.3 percent compared to adjusted net earnings of 187.2 million dollars for the nine months ended October 29, 2011,” with a significant portion of the losses coming from the shrinking Euro market.

Consequently, while the market toasts what it expects (wrongly) to be a successful holiday season, look for the crisis in Europe break on American retail shores in early 2013.

Margaret Bogenrief is a partner with ACM Partners, a boutique crisis management and distressed investing firm serving companies and municipalities in financial distress.  She can be reached at margaret@acm-partners.com.  

 


 

 

 

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Six Companies That Routinely Embarrass Themselves

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american apparel

Some companies have made so many horrible marketing or branding decisions, that their insanely crass moves barely even shock us anymore.

At this point, underage and under-dressed American Apparel models or questionably racist shirts from Urban Outfitters seem to be part of the companies' advertising strategies.

We've highlighted the brands that have the most checkered pasts.

6. Abercrombie and Fitch

Abercrombie has been making headlines for its questionable labor practices, racially insensitive tee-shirts, sexualization of little girls, and scintillating publication, "A&F Quarterly" (which had mostly naked, young-looking models) for the last decade.



One of A&F's most famous gaffes was selling a tee-shirt with the slogan "Wong Brothers Laundry Service – Two Wongs Can Make It White" in 2002.



Other bad-idea tee-shirts include past slogans on girls' tees that read "Available for parties" and "Who needs brains when you have these" in 2005 and "Female students wanted for sexual research" in 2009.



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American Apparel And Abercrombie & Fitch Are Realizing That Sex Does NOT Sell

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American Apparel Ad

As we push into the final shopping week before that retail holy grail of Christmas, it’s time for retailers to take stock of their sins and wins – who’s been profitably good and (gross) marginally naughty.  And for those retailers (and brands) that traditionally sell sex, this will turn out to be a nakedly bad selling season.

In particular, 2 companies - Abercrombie & Fitch and American Apparel - will most likely be waking up to a wicked holiday hangover, the cure which does NOT mean more of selling of sex, but instead necessary (and unsexy) operational and product fixes.

The recent decline in marketshare for the two above-listed retailers has been well-documented. No longer catching the eye of retail-and-internet savvy Millennials by selling overpriced, disposable product in a fast fashion world, A&F and AA find themselves in the middle of retail wasteland, with no consumer oasis in sight.

These are but two of many retailers that have recently lost their edge and customer base, as a combination of passé scandalous ad campaigns and mis-priced merchandise have ceded their place in the white noise of social media, online shopping, and a revolutionized production process that’s dropped prices and made inventory turns more important than ever.  After all, is it even news anymore that American Apparel’s offended someone, somewhere, with its ads of children (or models who look like children) placed in sexual poses? What worked before works no longer.

So what’s a retailer to do?

A&F and AA offer an illustrative lesson in the need to consistently change and evolve as retail continues pushing the boundaries of how and when and where to reach consumers.  No longer are ad campaigns (or shock value) enough – instead of continuing its reliance on scandalizing and titillating, American Apparel, for example, must now focus on leaning up its operating, working, and structural costs, which will in turn compress costs and drive up margins (seriously – WHAT company needs 800,000 highly-priced square feet in downtown LA?). 

A&F, in turn, has lost a third of its market value this year, as it continues to rely upon soft porn-inspired ads and bags to stimulate young shoppers who have already turned elsewhere for their faded t-shirt and slouchy boyfriend needs. The retailer must ditch immediately its stale product and slow-turning inventory, and decide whether it wants to compete with J Crew or H&M and produce, price, and market accordingly.

 

In conclusion, both A&F and AA must figure out what they want to be when they grow up.  After all, the market has passed them by – and it turns out to be one made up of consumers that can’t be titillated, seduced, or otherwise aroused into buying $60 henleys or $50 bodysuits. 

Margaret Bogenrief is a partner with ACM Partners, a boutique crisis management and distressed investing firm serving companies and municipalities in financial distress.  She can be reached at margaret@acm-partners.com.

 



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The Beatles' Former Headquarters Could Soon Be An Abercrombie Store

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the beatles

The former Apple Records building where the Beatles sang for the last time could soon be home to an Abercrombie store.

Abercrombie wants to open a children's outlet at London's 3 Savile Row, which is officially listed as a historical preservation site, Bloomberg News reported

The building houses the Beatles' former label, Apple Records. It's also where the band performed together for the last time in 1969. 

Local authorities recommended Abercrombie's proposal, despite protests from retailers in the area. 

"The council received objections stating the store would have 'an unacceptable impact on the character and function of Savile Row, inappropriate congregation of crowds on the street outside, increased footfall will lead to safety issues on the highway, and potential noise and disturbance to surrounding properties,'" according to Bloomberg. 

Abercrombie is best-known for its shirtless models, techno music and preppy clientele. The retailer has been especially successful in the U.K. and Europe. 

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Abercrombie's Comeback Story Isn't As Great As It Seems

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abercrombie & fitch

The official story from this year is that Abercrombie has been to hell and back.

Since 2007, the teen retailer has faced a series of problems. The international expansion was failing, designs were too preppy and CEO Mike Jeffries was accused of being a micromanager.

There were also lawsuits that took up resources and hurt people's perception of the brand. 

Then, out of nowhere, Abercrombie shocked Wall Street by announcing amazing results. Shares soared on the news. Everyone lauded Jeffries for managing expenses and putting Abercrombie on the right path.

But Samantha Panella Houser at MarketWatch cautions that the retailer's big comeback isn't what it seems. 

The biggest indicator that Abercrombie is in trouble can be seen through its international expansion, Houser said. She wrote:

International revenue grew 37% in the third quarter of 2012. Although this may appear strong, I would make the case that this is not very robust given that the company had 68% more stores open in the international market year-over-year and its square footage was up 82%. Why did its revenue growth trail that of its store growth? Because same-store sales were down 18% internationally.

Same-store sales reflect revenue growth over the past 12 months and are the retail industry's go-to measure for how well business is doing. 

Abercrombie's international expansion has been lauded in the past, but the fact that sales are down is troubling for the company's strategy.  

That means the retailer could actually be far from a comeback. 

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Jennifer Lawrence Talks About The Time She Modeled For Abercrombie

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Before she was an Oscar-nominated actress, Jennifer Lawrence worked as a model for Abercrombie. 

"I did stuff for Abercrombie & Fitch, but you'd never know because none of my pictures ever got released," the actress said on Conan O'Brien's show

Lawrence was supposed to be reenacting a football scene, but said the problem was"They were model footballing and I was real footballing."

The pictures weren't very graceful, Lawrence told Conan. 

"'There's this one picture where this girl is just about to catch the football, and I'm behind her, with flared nostrils, red face, my hair's crazy, and I'm like, 'WRAH!'And she screamed, 'Get her away from me!'"

Lawrence also had a stint on a commercial for MTV's My Super Sweet 16

Here's the video: 


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Abercrombie's Biggest Initiative Of The Past Five Years Is Failing

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Abercrombie & Fitch AdAfter U.S. teens stopped lining up to buy its signature cologne and $40 tank tops, Abercrombie looked overseas for help. 

But today Abercrombie forecasted that it would lose money in the first quarter, in part because sales are down internationally. 

That means that Abercrombie's biggest initiative of the past five years is failing. 

"Sales were down a whopping 14 percent internationally, suggesting that assortments aren't tailored enough or the store experience is uninviting," Brian Sozzi, chief equities analyst at NBG productions, told us. 

Consumers in Europe and Asia are often seen waiting in line to buy Abercrombie clothes at its New York flagship. While American teens got fed up with wearing logos a long time ago, they're hotter than ever in Europe. 

Abercrombie has already done major backpedaling in its international expansion, according to a note from Sterne Agee analysts Margaret Whitfield and Tom Nikic.

Following consistently bad sales numbers (international is down 26 percent from last year), Abercrombie slowed growth rate overseas and "postponed" the much-publicized openings of flagship stores. 

This was bad news because international markets were considered Abercrombie's only hope for growth. 

Perhaps Abercrombie could learn a thing or two from Gap. Both retailers once reigned the world of the young and hip, and both looked to expand internationally when things stopped going great in the U.S. 

But Gap CEO Glenn Murphy learned the hard way that location doesn't mean success. With his domestic and international businesses flailing, Murphy decided to bring in top-notch designers to reinvent Gap's product. 

With the right product, sales at the retailer soared, and Gap is now considered a retail success story. Maybe Abercrombie's clothes and store experience, and not its market presence, led to the current predicament. 

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Abercrombie & Fitch Refuses To Make Clothes For Large Women

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Abercrombie & Fitch Ad

Teen retailer Abercrombie & Fitchdoesn't stock XL or XXL sizes in women's clothing because they don't want overweight women wearing their brand. 

They want the "cool kids," and they don't consider plus-sized women as being a part of that group. 

Abercrombie is sticking to its guns of conventional beauty, even as that standard becomes outdated. 

Contrast Abercrombie with H&M, another favorite with the teen set, who just subtly introduced a plus-sized model in its latest swimwear collection. 

H&M has a plus-sized line. American Eagle, Abercrombie's biggest competitor, offers up to size XXL for men and women. 

Abercrombie doesn't even list women's XL or XXL on its size chart. Its largest women's pants are a size 10, while H&M's standard line goes up to a size 16, and American Eagle offers up to 18. 

It's not surprising that Abercrombie excludes plus-sized women considering the attitude of CEO Mike Jeffries, said Robin Lewis, co-author of The New Rules of Retail and CEO of newsletter The Robin Report.

"He doesn't want larger people shopping in his store, he wants thin and beautiful people," Lewis told Business Insider. "He doesn't want his core customers to see people who aren't as hot as them wearing his clothing. People who wear his clothing should feel like they're one of the 'cool kids.'" 

The only reason Abercrombie offers XL and XXL men's sizes is probably to appeal to beefy football players and wrestlers, Lewis said. 

We asked the company why it doesn't offer larger sizes for women. A spokeswoman told us that Abercrombie wasn't available to provide a comment. 

In a 2006 interview with Salon, Jeffries himself said that his business was built around sex appeal. 

“It’s almost everything. That’s why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don’t market to anyone other than that,” Jeffries said

Jeffries also told Salon that he wasn't bothered by excluding some customers. 

“In every school there are the cool and popular kids, and then there are the not-so-cool kids,” he told the site. “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely."

Jeffries said he thinks that including everyone would make his business boring. 

"Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don’t alienate anybody, but you don’t excite anybody, either," he told Salon. 

While a specialty retailer like Abercrombie can't be expected to appeal to everyone, the brand's standard of beauty is quickly becoming stale. 

Plus-sized is no longer a niche market: 67 percent of the apparel purchasing population fit that label, and the number is growing all the time. 

For too long, this sizable and growing segment has been ignored," writes Margaret Bogenrief at ACM Partners. "Treated shabbily, ostracized by the “pro-skinny fashion world,” and seemingly discarded by designers, department stores, and retailers alike, plus-size fashion consumers, critics, and bloggers are taking back their spending and sartorial power and, in turn, changing both the e-commerce and retailing landscapes."

Ignoring this "revolution" could be costly for businesses, Bogenrief writes. 

More brands are featuring curvy, "real-sized," models. 

In addition to H&M's Jennie Runk, Dove's wildly popular "Real Beauty" campaign highlights women who aren't as thin as traditional models.

But it's unlikely that Abercrombie will ever sway from its image, Lewis told us.  

"Abercrombie is only interested in people with washboard stomachs who look like they're about to jump on a surfboard," Lewis said. 

SEE ALSO: H&M Subtly Used A Plus-Sized Model For Its Swimsuit Collection >

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Man Gives Abercrombie Clothes To Homeless People As Revenge For CEO's 'Cool Kids' Comment

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Greg Karber was bothered by our story about Abercrombie refusing to make clothes for large women since CEO Michael Jeffries apparently doesn't consider that group to be part of the "cool kids."

So Karber, an LA-based writer, decided to give Abercrombie a "rebranding" by giving away its clothes to homeless people. 

The Huffington Post tipped us off to his video, which is quickly going viral. 

Karber scoured thrift stores for Abercrombie clothes. Then, he went to Los Angeles' Skid Row and began giving them away. 

Check out the video:

SEE ALSO: Abercrombie & Fitch Refuses To Make Clothes For Large Women >

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