It will be a challenge to understate the significance of Abercrombie & Fitch in the retail apparel market. Founded in 1982 by David Abercrombie with the intention of targeting America’s elite outdoorsmen with quality hunting goods and gear, it’s many changes reflect the almost nigh unpredictability of the fashion industry as a whole.
But the Abercrombie & Fitch (NYSE: ANF) brand (sometimes abbreviated to A&F) still carries with it a lot weight, as well as an impressive retail footprint that still delivers. The recent 2021 saw a quarter 1 filing of performance that surpassed some sales levels from even pre-pandemic times. Yet does this translate to it being a investment for the retail-minded investor?
Quantitative Analysis: Can Long Holders Hold On?
Numbers wise, Abercrombie & Fitch’s performance reflects its now relatively unremarkable line of clothes. While they have started from great heights in clothing, supplying some of the most unique pieces in outdoor gear, their price reflects their now mass-marketed clothing attempting to hit the lowest common denominator.
Their YTD price performance stays relatively close to where it started, coming in at $34.79, 0.54% down from its price at the start of the year at $34.79. Going even further back shows a similarly unremarkable performance in terms of price, with the past six months showing -12.43% in price value. Long holders may be the winner here, with a relative price increase of 190.16% for those who’ve held on to the stock for 5 years and more.
Qualitative Analysis: New Media Sheds Light on Dark Past
These fluctuations on price can easily be put on to the difficulties that the COVID-19 pandemic has wrought on retail stores in general, additional media attention brought about by a Netflix documentary may have soured the market outlook on this once-powerful brand. Titled “White Hot: The Rise & Fall of Abercrombie & Fitch”, the documentary explores how the brand has dabbled in some questionable marketing practices involving sex and exportation, while also being accused of generally pandering to Caucasian consumers. The latter in particular has caused a class-action lawsuit from prosecuting parties in the hopes of indemnification.
While retail is a tricky thing to bet on these days, the risk certainly climbs so much more with a brand as hit with issues as Abercrombie & Fitch. While there are the real issues of how the brand has been managed over the years, there also remains its position in an ever changing market. As of now, the A&F brand should be considered a no-deal for those looking at the short-to-medium term. Long-term investors can explore this, but there are likely way more better performing brands in the market today.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only