The road for abercrombie
these years is not easy, though, it recovers very well every time. In 2010, it reduced its price finally in order to increase its own competitiveness in the global market. Hollister London has increased its gross margin up to 65% and this is a very stand out number for it. It seems that this firm has recovered and starts to put up big numbers again when the global economy is still depressing.
By beginning to set up its e-commerce and international operations, Abercrombie & Fitch tries to distinguish itself from the other competitors. During the last quarter, with the e-commerce sales expanded by 32% and the international sales increased by 64%, it seems that its strategy has begun to work. Here I would like to probe into the two factors that make Abercrombie & Fitch successes.
- International Expansion.
It is no doubt that the growth for abercrombie and fitch
lays abroad. Its market in the US has saturated so the growth may keep increasing over the long term in the single digits cumulative of all store brands. The other competitors can not fit to hold a candle to it when they find out how vital the move is.
In 2006, Abercrombie and Fitch has stepped abroad and it seems that this was a wise move. As I mentioned above, the firm’s international sales has increased by 64% in the most recent quarter. More than others, the Asian markets is the most active one. What’s more, Europe is also able to provide strong growth yet the competition there may be higher than the other. Therefore, it is more reluctant to find Europe an easy place for expansionary growth.
China, owing to its great population, growing middle class, socio-economic culture and the level of its GDP growth, it becomes the standout opinion for abercrombie soldes
. We can know from the news reports that the opulence and extreme level of wealth flowing in China are wonderful. As a result, China is treated as the perfect place for Abercrombie to expand its market before its competitors enter this huge market.
- Spectacular Business Strategy
Although many people think the success of abercrombie and fitch pas cher
is because of its image conscious branding and advertising campaigns featuring scantily clad models, I don’t think those are the whole reasons. As for Abercrombie and Fitch, it owns a business model that no other competitor can be able to match.
The sales of Abercrombie and Fitch is 19% higher that its closest competitor American Eagle Outfitters(AEO) in the last quarter. Abercrombie has 250 domestic and 1000 foreign stores while AEO operates only 1000 stores in the US. In this case, I don’t think Abercrombie and Fitch will have any question in operating a better business model than AEO, which is already its closest competitor, not to mention the others.
The abercrombie and fitch paris
will not withhold its power to stronger itself and it certainly operates this ability. This firm owns fewer stores in absolute terms with more brands than its closest competitor. And its sales grow in a very optimistic way. So that is why we rate it a BUY.