Abercrombie Refuses to Discount, Stock Plunges

By
Music: uhn-ts, uhn-ts, uhn-ts, uhn-tsss…

Eight years ago, Abercrombie & Fitch was the bee’s knees of discreetly sexy casualwear. Overpriced sandblasted jeans and button-up plaid shirts were boxed up and put under the tree (or menorah) of any 16-year-old with a Suburban in the driveway. Those were the good, pre-recession, naked-models-riding-horses-in-catalogues days. But now Abercrombie is suffering much worse than its competitors, like American Eagle, in the economic downturn. Though the competition is discounting prices to get consumers to shop, Abercrombie has kept its prices the same because they don’t want to look cheap. The Wall Street Journal reports:

Wall Street has begun to question the soundness of Abercrombie’s no-discount pledge. The stock has tumbled nearly 80% from its January high of around $80, in part because of the pricing strategy. Some analysts now rate the stock a “sell.”



“We hear your concerns,” said Chairman and Chief Executive Michael Jeffries in an earnings call with analysts last month, but “promotions are a short-term solution with dreadful long-term effects.” Marking down clothes now could lead to the brand being seen as something cheap, he explained.

Eight years ago, Abercrombie & Fitch was the bee’s knees of discreetly sexy casualwear. Overpriced sandblasted jeans and button-up plaid shirts were boxed up and put under the tree (or menorah) of any 16-year-old with a Suburban in the driveway. Those were the good, pre-recession, naked-models-riding-horses-in-catalogues days. But now Abercrombie is suffering much worse than its competitors, like American Eagle, in the economic downturn. Though the competition is discounting prices to get consumers to shop, Abercrombie has kept its prices the same because they don’t want to look cheap. The Wall Street Journal reports:

Abercrombie Refuses to Discount, Stock Plunges