It’s not just individuals who can get makeovers in today’s economy – sometimes, a big retailer needs one as well.
After an unprecedentedly slow year, Abercrombie & Fitch Co. has decided to cutback on approximately 150 corporate jobs. This decision follows unusually slow mall traffic and a heavier focus on fast-fashion brands. In a statement made last week, Abercrombie’s spokesperson said that the job eliminations were done to “ensure we are structured appropriately for the current retail environment”.
The company’s shares have been declining, and fast. After a 56% decrease in 2016, they fell another 2.7% on Thursday and currently sit at $11.71. This was largely due to the fact that its earnings were well below analysts’ expectations.
Unfortunately, Abercrombie is not alone in its struggle. Macy’s Inc. and Sears Holdings Corp. are also closing stores. Further, The Limited, which is (or perhaps, was) a well known store, has stated that it would close its stores and file for bankruptcy earlier this month.
Hollister Co., Abercrombie’s division for younger customers, is also making changes to the items it will be carrying in its stores, hoping that this makeover will save it from the same fate that Abercrombie is currently facing.
Now, just as a little reminder, we thought it would be worthwhile to refresh your memory on a statement issued by Abercrombie’s former CEO, Mike Jeffries, back in 2013. When asked about the company’s brand, Jeffries said, “in every school there are the cool and popular kids, and then there are the not-so-cool kids. 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.” In fact, Abercrombie does not even list XL or XXL on its women’s size chart.
Our ruling: Your “exclusionary” strategy did not work so well, Mr. Jeffries. And it is unfortunate that the 150 workers have to lose their jobs as a result. We call for a different route – one that does not include discrimination and has a higher regard for job security.