On a comeback: Abercrombie & Fitch stock outperforms Nvidia

Once a brand in decline, Abercrombie & Fitch, the iconic 1990s brand known for its preppy style, has made an unexpected comeback in the retail world, giving it the status of an unlikely market leader once again.

The news was so significant that the Wall Street Journal dedicated an entire report to it: “Why Abercrombie & Fitch’s Stock Has Exploded Faster Than Nvidia’s”. Nvidia, the tech giant, whose spectacular financial performance continues to dominate the news.

To get there, the Ohio-based company's path to the top has obviously not been without its challenges. The rise of online shopping and fast fashion gave Abercrombie a sense of obsolescence. Moreover, the brand had to face public backlash following lawsuits regarding racial, religious and sexual discrimination, as well as harassment cases.

Thus, in 2017, when she took the reins of Abercrombie & Fitch, Fran Horowitz was fully aware of the magnitude of the task ahead. The brand, once adored by young millennials, was now outdated and plagued by numerous controversies. Determined to restore the company's image, Horowitz launched a complete overhaul, tackling several fronts simultaneously.

Winning back the hearts of customers

The first step was to regain the trust of consumers, particularly young millennials who had abandoned the brand. Abercrombie then committed to creating a more inclusive and welcoming environment, addressing the issues of discrimination and harassment that had tarnished its image.

Targeting the new generation

Recognising the evolution of consumer preferences, Abercrombie refocused its marketing strategy on Generation Y. The brand adopted a fresher and more modern image, in line with the aspirations of this new target.

Investing in technology and streamlining operations

Aware of the importance of digital, Abercrombie invested heavily in its online presence and modernised its operations. The brand also streamlined its costs, particularly by optimising inventory management. Learning from past mistakes, Abercrombie adopted a more sober approach to inventory, reducing waste and maximising profits.

These strategic decisions have paid off. Over the past year, Abercrombie's share price has climbed more than 245 percent, fuelled by strong financial performance and positive prospects. The company has thus outperformed tech giant Nvidia in terms of stock growth, despite a higher overall share price at Nvidia.

Horowitz attributes Abercrombie's success to the transformation of the entire business. She highlights the importance of "rebuilding our brands, investing in our technology and fundamentally rebuilding the business from top to bottom".

The main takeaway from Abercrombie's resurgence is the power of adaptation. By learning from past mistakes, refocusing on core values and embracing change, a struggling brand can not only survive but also thrive in a dynamic market. A management lesson for any company facing similar challenges.

This article originally appeared on FashionUnited.FR. Translation via AI and edit by Rachel Douglass.