Girlcott Against Abercrombie Just Beginning

In early December, it was reported that the Securities and Exchange Commission is examining trades of shares of Abercrombie & Fitch (ANF:NYSE) that occurred last summer. You are probably asking, so what does that have to do with modesty?

Everything actually. Over the last five years, the product and marketing choices of A&F have repeatedly angered consumers resulting in boycotts by almost every possible group out there. I definitely don’t have enough space here to list all the offensive campaigns and products they’ve launched. But a few years ago, A&F outraged parents by selling thongs for grade school girls which had the words “eye candy” printed inside a tiny heart. This year A&F’s product management team was proud of their new inventory—shirts that read, “Who needs brains when you have these?”Another read:  “All Men Like Tig Old Bitties.” And that’s just a sampling.

Although the SEC did not say which A&F share trades were of particular concern, the large trade of CEO Michael Jeffries does raise eyebrows, especially the eyebrows of investors who afterwards filed a handful of class-action lawsuits. Here’s the scoop: In June, CEO Jeffries and his directors gave a rosy, upbeat sales forecast to the public causing the share price to respond nicely. Shortly after, Mr. Jeffries unloaded 1.5 million shares, worth roughly $110 million. While counting his pile of dollars, he probably gave himself a big ol’ high five.

But having worked in corporate finance myself, it’s hard to stomach his supposed dismay when a few weeks later the company reported a significant profit miss due to poor sales and significant unsold inventory. This profit miss caused the stock to plummet, and he very conveniently avoided that decline. If he planned that deliberately, he could be in trouble. Whether "false and misleading" or just plain questionable, there is no doubt in my mind, unless he was drunk at the wheel, that he and his directors knew at the time of his trade that their inventory and marketing choices for 2005 had cost them dearly—they had a lot of jeans and shirts that were collecting dust.

But their problems don’t stop there. In November, Jeffries found himself face to face with a pack of teenage girls who arrived on his doorstep, literally, from Pennsylvania. This pack of articulate and determined girls arrived, demanding that he and his executives yank every single piece of offensive shirt inventory. The advertising industry, rarely known for their sense of modesty, essentially laughed at the girls’ effort. Ad executives said the Pennsylvania girls were just inadvertently feeding A&F’s plan, giving A&F free publicity.

But the girls are the ones who will, in the end, have the last laugh. The "Girlcott" girls ended up on the “Today” show with Katie Couric, Fox’s “Hannity and Colmes,” CNN, not to mention the many blogs, including this one, that are hummin’ and buzzin’ about the market strength of these girls. The girls were from the Women and Girls Foundation of Southwest Pennsylvania and as result of their Girlcott, people from across the country have contacted them to find out how they can get involved and start similar efforts in their own cities and schools.

The result? Although initially A&F blew off the girls as insignificant, it was Abercrombie which crumbled. In November, they agreed to pull the offensive shirt inventory. Then Abercrombie and the Girlcott girls issued a joint statement that said, “We recognize that the shirts in question….might be troubling to some.” I skeptically note that A&F’s decision to pull the inventory came right before the SEC announced they had gone banging on A&F’s door, which means that it is also the exact same time the executive team needs a “we’re just a bunch of nice guys” public relations move.

Also, despite their seemingly well-intentioned compromise, their 3rd Quarter financial statements indicate they are very much bluffing about their concern for girls. They state to their investors that the company has made a "focused strategic investment in…other basic categories like polos, knits and graphic tees." And, disappointingly, the company's website is still selling shirts for little girls that say, "Boyology Major," "Good Things Come to Those Who Are Blonde" and for Christmas they are selling shirts for your little grade school girl that say, "See You Under the Mistletoe." For teens, a shirt that reads "Never a Silent Night" or "Is that a Candy Cane in Your Pocket?" For other girls, "I Make You Look Fat," "Bowl of Bitchy,"  "Not Tied Down (Maybe Later)," "Blondes Are Adored, Brunettes Are Ignored," and "When the Going Gets Rough the Tough Go Blonde."   

So, although I applaud their decision to yank some inventory, I’m definitely not convinced of their intentions.    Hence, it's very clear the battle over A&F’s trash is not over yet. Because they’ve launched offensive inventory and marketing campaigns every year, if the SEC announces that Jeffries is “in the clear,” they’ll do something sleazy all over again.   

To discourage them from another disgraceful repeat performance, its best to not purchase their brand but also:    Email  investor_relations@abercrombie.com or call Thomas D. Lennox, Director, Investor Relations and Corporate Communications of Abercrombie & Fitch, +1-614-283-6751.

Or contact their ad agency, Sam N. Shahid Jr., President and Creative Director of Shahid & Company. Sam Jr has repeatedly defended his "shockvertising", and has been a long-term member of the Board of Directors, hmmm...no wonder their ad plan is stuck in a sleazy rut.  No luck getting contact info. on this guy.

So to close, I make an unusual combined prediction—it is a rarely offered all-in-one stock and sitcom episode forecast. Here it is: I predict that the trend for sleaze-inspired fashion is reversing, and unless A&F convinces their ad agency and their product management team to change their style or terminate, I forecast that A&F will, in the not too distant future, become a fashion 'has been’, and also become a 'dump it and run' stock.

But I also predict an A&F meeting fit to be copied by the hit TV comedy series Office, during which A&F’s marketing and advertising departments find themselves groveling to their finance team. In the meeting, they'll try desperately to explain why they missed the next big trend—a fashion backlash against Abercrombie’s sleazy style. In response, the finance team will hand out leftover shirt inventory to the marketing folks which reads, “Who needs brains when I have these?” And on the back of it, the finance department will have scribbled, "Apparently, I do."

Comments

[Mary O'Hayes]

Thanks for the contact info, I'll send an e-mail conveying my disgust with their tacky, trashy clothing. Unfortunately, they're not the only ones. I was shopping at a mall today, and in the American Eagle Outfitters store I saw T-shirts that said "Works Better than Mistletoe" (with a picture of a beer mug on the shirt) and "I Can Be your Private Dancer." Walked out of that store without buying, but I wish I had spoken up to the store manager. Went to Old Navy next, and at the entrance of that store was a mannequin with a T-shirt reading "Candy Cane Licker." Time to write more letters to the store managers, will it do any good?

[Anti-Abercrombie Gal]

I used to wear Abercrombie in high school. There used to be a time they sold modest, colorful, cozy (if pricey) sweaters. I remember when they first released their Abercrombie Magazine though and that did it for me! I BOYCOTT ABERCROMBIE.

[Jeannine]

Yes, writing letters will do good, and especially not buying their products! There are numerous examples where those efforts have paid off extremely well.
But I also believe the trend is reversing--fashion is moving away from slut-inspired clothing. Trends are very powerful movements with powers that go well beyond letters. Just yesterday, a twelve year old girl told me that she and her friends have a pact--no one "in" unless they reject Britney Spears and anything tied to her. An even younger girl told me how much she dislikes the abercrombie-style fashions--they look "bad" and the girls wearing them are "really mean", their clothes are "horrible". Mostly, it is an opportune time for a talented entrepreneur to pick up running while the fashion dinosaurs are falling asleep. I guarantee anyone smart enough to do that will be far more profitable than abercrombie.

[janet]

holaa!!! soy janet me gusta mucho peero mucho la marca abercrombie pero no se que que tiene que ver la frase que tiene una de sus camisas: "take me to mistletoe" no entiendo absolutamente nada el que me quiera explicar por favor escribanme a mi correo epa_janet@hotmail.com