So Abercrombie & Fitch relaunches its highly suggestive catalog/magazine… and its second quarter direct sales jump 50%, while comparative store sales rise by a mere 5%. Quelle surprise!
A bit of history: In 2003 the company spiked its six-year-old magalog, A & F Quarterly, and indicated it would make up at least some of the difference with increases in catalog circulation.
But sexy sells, and in mid-July Abercrombie & Fitch brought A&F Quarterly back from its hiatus. While the company stopped short of specifically attributing its direct-to-consumer success to the publication’s return, during an earnings call CFO Jonathan Ramsden observed that the company’s back-to-school marketing was built around the issue’s “Screen Test" theme. (Note: This content may not be appropriate for some conservative settings – which, of course, is A&F’s point.)
“We used [the theme] in multiple ways; in stores, Web site and social media,” Ramsden said. “Even what you heard on the in-store sound system built on that theme.”
CEO Mike Jeffries acknowledged that the relaunch of the catalog involved a more highly integrated effort than the company had done in years past.
The Quarterly's relaunch was by no mean the only contributor to Abercrombie's direct operations' fortunes. The full impact of the Quarterly's relaunch, coming as it did toward the end of the quarter, along with the integrated campaign surrounding it, will likely spill over into the company's current quarter. Abercrombie's second quarter ended July 31.
While Jeffries added that the company would be adding resources, upgrading and expanding its platforms and allocating more inventory to its direct channels, he declined to go into specific marketing strategies for the fall season.
So how did the company do during its second quarter? Total sales rose 17%, to $745.8 million, and net income reached $19.5 million, in contrast to a net losss of $26.7 million a year ago. But while comparable store sales were up only 5%, direct sales skyrocketed 50% to $69 million.
