In the midst of declining share prices (20%) since last year, A&F is scrambling to update its store design, ambiance and hiring policies. This is because sales in stores have dropped for the 6 of 8 years and profits have shruken 5.1% in 2014 from the previous year.
A&F has a strong iconic brand, for them to try a more mainstream approach, they need to make sure its spirit is retained at each step of the evolution. Examples of changes are: removal of its discriminating ‘looks policy’ that aims to hire employees that fit their narrow requirements for attractiveness, brighter lights, less pungent cologne sprayed in stores and softer volume and more diverse music selection than it’s usual thumping house music.
The brand’s reputation also has been damaged after losing an anti-discrimination lawsuit filed by a woman that covered her hair for religious reasons.
Personally, I never found the clothes to be my preference and found them to be unnecessarily over priced. Also I wonder in general, when a company positions a brand like A&F to play on people’s insecurities about their looks, I question the ethical nature of the brand. In addition, being more exclusive in their hiring may have inadvertently resulted in employing sub par sales associates over more skilled ones that may not fit their unrealistic looks criteria.
At least finally, the market has forced them to realize that their approach was wrong and time will be the judge of whether they will be able to adapt and protect their existing brand equity, while remaining profitable.
Posted by: Yusuf Hasan