Business Goverment and Society Final Presentation

Group G: Juan Pablo David, Caleb Nathaniel Hall Forbes, Belinda Furrer,

Nikita Rogozin, Christian Sayn-Wittgenstein, Dae Sop Shin

Question 1

Do you or did you ever buy Abercrombie and Fitch brands (including Hollister, Gilly Hicks, abercrombie kids)?

a) Yes

b) No

Question 2

How do you perceive A&F as a brand:

a) Positive

b) Neutral

c) Negative

Mike Jeffries, CEO

That’s why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don’t market to anyone other than that...Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely." - Abercrombie & Fitch CEO Mike Jeffries (via Business Insider)

Financial Performance

Shareholders

Shareholder Value?

1-Jul-0

3

1-Nov-0

3

1-Mar-

04

1-Jul-0

4

1-Nov-0

4

1-Mar-

05

1-Jul-0

5

1-Nov-0

5

1-Mar-

06

1-Jul-0

6

1-Nov-0

6

1-Mar-

07

1-Jul-0

7

1-Nov-0

7

1-Mar-

08

1-Jul-0

8

1-Nov-0

8

1-Mar-

09

1-Jul-0

9

1-Nov-0

9

1-Mar-

10

1-Jul-1

0

1-Nov-1

0

1-Mar-

11

1-Jul-1

1

1-Nov-1

1

1-Mar-

12

1-Jul-1

2

1-Nov-1

2

1-Mar-

13

1-Jul-1

3 -

50.00

100.00

150.00

200.00

250.00

300.00

Abercrombie & Fitch Co. _x000d_ S&P 500_x000d_ S&P Retail Apparel Sector

Outperformance?

31-Jul-0

3

23-Oct-

03

15-Jan-04

8-Apr-0

4

1-Jul-0

4

23-Sep-04

16-Dec-

04

10-Mar-

05

2-Jun-05

25-Aug-0

5

17-Nov-0

5

9-Feb-06

4-May

-06

27-Jul-0

6

19-Oct-

06

11-Jan-07

5-Apr-0

7

28-Jun-07

20-Sep-07

13-Dec-

07

6-Mar-

08

29-May

-08

21-Aug-0

8

13-Nov-0

8

5-Feb-09

30-Apr-0

9

23-Jul-0

9

15-Oct-

09

7-Jan-10

1-Apr-1

0

24-Jun-10

16-Sep-10

9-Dec-

10

3-Mar-

11

26-May

-11

18-Aug-1

1

10-Nov-1

1

2-Feb-12

26-Apr-1

2

19-Jul-1

2

11-Oct-

12

3-Jan-13

28-Mar-

13

20-Jun-13

0

100

200

300

400

500

600

700

800

900

1000

Abercrombie & Fitch Co. _x000d_ American Eagle Outfitters Inc._x000d_ Aeropostale Inc._x000d_Gap Inc._x000d_ H&M Hennes & Mauritz AB_x000d_ Urban Outfitters Inc._x000d_

Shar

epric

e (In

dex

= 10

0)

Employees

Employment ScandalsHiring Good

Looking store staff “models”

Firing because of Age

Making personnel BUY A&F clothes to

wear in store

Asking male model to masturbate for

photorshoot

Refusing to hire minorities

Jeffries apologized,but…..

Customers

Activists

A destructive narrativeHigh school kids don’t need any narrative to help them segregate themselves

– Yet A&F gives them one…

“As silly as it seems, it made me feel worthless to not be able to wear the "it" styling that everyone else was wearing.”

- Benjamin O’Keefe, Change.org Petition Organizer

Sports competitions

“Anti-bullying” scholarship

Reduce GHG emissions by 8% before 2018

$9.5M raised in 10 years, through local donations to Ohio hospitals

Equality?

Equality?

Recommendations

Question 3

How do you NOW perceive A&F as a brand:

a) Positive

b) Neutral

c) Negative

Main issues:

1) Underperformance of shares2) Discrimination of employees3) Discrimination of customers4) Negative social footprint5) Lack of reasonable CSR6) Highly questionable CEO

Alternative 1:Increasing customer base (no change in overall positioning)• New sizes• New products• New markets

Alternative 2:Align CSR with market strategy:• Challenges• Anti bullying campaign• Strategic philantropy

Alternative 3:Change A&F’s vision and positioning: • Aspirational• Inclusion• New culturePreferred scenario but…

… CEO Mike Jeffries needs to leave!

Questions & Answers