Inside a newly opened Abercrombie & Fitch store on New York City’s Fifth Avenue, a peek into the storied brand’s future appears.
Shoppers from around the world climb up and down the stairs at the two-story location. Joyous teens and aging millennials leave with the latest styles, at a brand formerly viewed as for youths only. A bright, open shopping environment seems to scream, “We are the new Abercrombie & Fitch.”
The store’s positive vibe isn’t lost on its CEO Fran Horowitz.
"The storefront really does exemplify where we are today. It is a welcoming, inviting, inclusive brand. Very different than what our heritage was in the past," Horowitz exclusively said on Yahoo Finance's "Lead This Way."
Horowitz’s work at Abercrombie & Fitch (ANF) shouldn’t be lost on investors either.
The longtime retail exec saved the company through focused leadership and bringing others along in the turnaround journey.
Before Horowitz ascended to the corner office at Abercrombie & Fitch, things were downright ugly.
The 131-year-old brand was no sexy retail story when Fran Horowitz took over as CEO in February 2017, after engineering a comeback for the Abercrombie-owned Hollister brand.
The company’s moral compass was being questioned after bizarre behavior by former CEO Mike Jeffries. Said questionable conduct has resurfaced recently, years after Jefferies was axed. A BBC investigation alleged that Jeffries exploited men at sex events he hosted globally (Abercrombie is looking into the allegations).
The stores were a terrible place to shop toward the end of Jeffries' tenure. The financials were on the skids. Suitors for the company were reportedly kicking the tires. Its image exuded an old fashioned, preppy tone.
Horowitz’s attack plan to save a brand once worn by former President Teddy Roosevelt?
Listen closely to shoppers and employees. Show empathy. Rebuild Abercrombie's culture at its Columbus, Ohio, headquarters. Then swing big — and quickly — to reinvent a beloved mall staple.
Horowitz put an end to the overbearing cologne sprayed inside of Abercrombie & Fitch stores. The lights were turned back on so people could see what they were buying. More inclusive marketing and clothing sizes launched. Half-naked models no longer stood outside the doors.
"We have come so far from that," Horowitz pointed out.
Financial discipline was restored to a company that never had it under Jeffries. Millions of unproductive square feet of physical shops were shuttered.
Horowitz has run a master class on leadership to save the once illustrious brand.
"Turning around Abercrombie really is a whole different leadership level because no one said it could be done. I mean all the doubters when I joined the company almost nine years ago just couldn't believe that we could turn this brand around," Horowitz added.
Given Horowitz’s career arc, her work at Abercrombie & Fitch shouldn’t be a surprise.
Horowitz got her start folding clothes at a local shop while in high school. She exited college and headed down a path of retail excellence, making stops at Bergdorf Goodman, Express, and Ann Taylor.
Today, Horowitz has a lot to show from her extensive experience.
Sales at Abercrombie & Fitch are growing again. Hollister is still doing well. The holidays appear to be off to a promising start, Horowitz says.
The company is selectively opening new stores once more. And finally, the company’s brands are being viewed as cool by a new generation.
"We see sales momentum continuing, as multi-year efforts spanning marketing, product, and in-store presentation have yielded distinctive brands that strongly resonate with their particular audiences," Jefferies analyst Corey Tarlowe said in a recent client note.
Shares of Abercrombie are up 265% in the past five years according to Yahoo Finance data, dusting the S&P 500's 65% gain. Longtime mall rival American Eagle Outfitters' stock is down 18% over the same timespan, while Gap is off by 29%.
Horowitz said her time at Abercrombie & Fitch has been a challenging, rewarding journey, but it isn’t over yet.
"I guess what I would hope for is that my legacy would be a leader that people really enjoyed working for. Someone who brought them inspiration, happiness, taught them a lot along the way, and had them take away good lessons from all of that," Horowitz says.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
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