This document summarizes a presentation about Abercrombie & Fitch's business practices and financial performance. It discusses controversies over the brand's exclusionary hiring and marketing practices as described by former CEO Mike Jeffries. It also analyzes the brand's declining financial results and underperforming stock price in recent years. Finally, it considers recommendations for improving the brand's social impact and business strategy, including increasing diversity, aligning CSR with its market strategy, or overhauling its vision under new leadership without CEO Mike Jeffries.
Unit-IV; Professional Sales Representative (PSR).pptx
Abercrombie and Fitch case BGS final presentation
1. Business Goverment and Society
Final Presentation
Group G:
Juan Pablo David, Caleb Nathaniel Hall Forbes, Belinda Furrer,
Nikita Rogozin, Christian Sayn-Wittgenstein, Dae Sop Shin
2. Question 1
Do you or did you ever buy Abercrombie and
Fitch brands (including Hollister, Gilly Hicks,
abercrombie kids)?
a) Yes
b) No
3. Question 2
How do you perceive A&F as a brand:
a) Positive
b) Neutral
c) Negative
6. 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...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." - Abercrombie & Fitch CEO Mike Jeffries
(via Business Insider)
7. Financial Performance
FINANCIAL SUMMARY
The following summarized financial and statistical data compares Fiscal 2012, Fiscal 2011 and Fiscal 2010:
2012 2011 2010
Net sales by segment (in thousands) $ 4,510,805 $ 4,158,058 $ 3,468,777
U.S. Stores $ 2,615,138 $ 2,710,842 $ 2,546,798
International Stores $ 1,195,016 $ 894,616 $ 517,005
Direct-to-consumer $ 700,651 $ 552,600 $ 404,974
Net sales as a % of total sales
U.S. Stores 58 % 65 % 73 %
Table of Contents
ABERCROMBIE & FITCH CO.
FINANCIAL SUMMARY
(Thousands, except per share and per square foot amounts, ratios and store and associate data)
(Information below excludes amounts related to discontinued operations, except where otherwise noted)
2012 (1)
Restated 2011 (2)
Restated 2010 (2)
2009 2008
Net Sales $ 4,510,805 $ 4,158,058 $ 3,468,777 $ 2,928,626 $ 3,484,058
Gross Profit $ 2,816,709 $ 2,550,224 $ 2,217,429 $ 1,883,598 $ 2,331,095
Operating Income $ 374,233 $ 221,384 $ 237,180 $ 117,912 $ 498,262
Net Income from Continuing Operations $ 237,011 $ 143,138 $ 155,709 $ 78,953 $ 308,169
Income (Loss) from Discontinued Operations, Net of
Tax
(3) — $ 796 $ — $ (78,699) $ (35,914)
Net Income
(3)
$ 237,011 $ 143,934 $ 155,709 $ 254 $ 272,255
Dividends Declared Per Share $ 0.70 $ 0.70 $ 0.70 $ 0.70 $ 0.70
Net Income Per Share from Continuing Operations
Basic $ 2.89 $ 1.65 $ 1.77 $ 0.90 $ 3.55
Diluted $ 2.85 $ 1.60 $ 1.73 $ 0.89 $ 3.45
Net Income (Loss) Per Share from Discontinued
Operations
(3)
Basic $ — $ 0.01 $ — $ (0.90) $ (0.41)
Diluted $ — $ 0.01 $ — $ (0.89) $ (0.40)
Net Income Per Share
(3)
Basic $ 2.89 $ 1.66 $ 1.77 $ 0.00 $ 3.14
Diluted $ 2.85 $ 1.61 $ 1.73 $ 0.00 $ 3.05
Basic Weighted-Average Shares Outstanding 81,940 86,848 88,061 87,874 86,816
14. Employment Scandals
Hiring Good
Looking store staff
“models”
Firing because of
Age
Making personnel
BUY A&F clothes to
wear in store
Asking male model
to masturbate for
photorshoot
Refusing to hire
minorities
Jeffries apologized,
but…..
24. A destructive narrative
High school kids don’t need any narrative to help them segregate
themselves
– Yet A&F gives them one…
“As silly as it seems, it made me feel worthless to not be able to wear
the "it" styling that everyone else was wearing.”
- Benjamin O’Keefe, Change.org Petition Organizer
33. Question 3
How do you NOW perceive A&F as a brand:
a) Positive
b) Neutral
c) Negative
34. Main issues:
1) Underperformance of shares
2) Discrimination of employees
3) Discrimination of customers
4) Negative social footprint
5) Lack of reasonable CSR
6) Highly questionable CEO
J.P. – Memorize the quote!That is our vision. The one that brings us success.
And our vision produces results! See, our revenues grew by 54% since 2009 and profit per share increased by the whopping 2.2 times!!!Though our US operations are stable (due to saturation), our European/International and internet sales are growing at almost 50% a year
Satisfied customers
They call us models, but we are paid not at model wages. The relationship is impersonal and mechanistic! Body expectations are unrealistic and in order to keep the job we may need to diet and take steroids. And you can be sent to work out in the stock room for “not fitting looks” or even fired!
In the US, youth suicide is a serious public health problemFor youth between 10 and 24, suicide is the third leading cause of death.A nationwide survey of youth in grades 9–12 in public and private schools in the United States (U.S.) found that:16% of students reported seriously considering suicide13% reported creating a plan8% reporting trying to take their own life in the 12 months preceding the survey. Each year, approximately 157,000 youth between the ages of 10 and 24 receive medical care for self-inflicted injuries at Emergency Departments across the U.S.
Yes
Yes
Yes
The company damages the society, hurts our children… but it talks the talk, but does not walk the walk! Something cearlyneeds to be done!