Name: Abercrombie CEO on retailer’s turnaround: 'We did it. We’re back.'
Uploaded: 2022-11-23
Duration: 8 min 52 s
Description: Fran Horowitz says of her six years as CEO 'we've come a long way from when I first walked in the door.'

Fran Horowitz says of her six years as CEO "we've come a long way from when I first walked in the door."

Abercrombie CEO on retailer’s turnaround: "We did it. We’re back."

Leadership

Abercrombie CEO on retailer’s turnaround: "We did it."

Fran, so good to see you again and to talk about all the changes going on at Abercrombie, you transformed the company, the brands, the image, how would you describe how Abercrombie is today, it has been an amazing, amazing journey, you know, I've been in this industry for 35 plus years and I have to say the last eight years have been truly the most rewarding, incredible. I walked in in 2014 to 2 brands to iconic global brands that were really in decline and we have done exactly what you said, we have gotten that brand health back, we have a very engaged consumer base, our associates are really thriving and we, we did it, you know, no one thought particularly with Abercrombie brand that it was possible and our favorite thing to say right now is we're back. One of the things that you did was to rebuild the brands, you separated out Abercrombie and Fitch Hollister and Gilly Hicks, why was it so important for you to do that as a lifelong merchant, You know when I interviewed for the original position of running Hollister, I went to the mall and I saw that essentially the brands have become one, the product was all the same, Just a different price point and what we had to really decide was is there room for both brands to live independently or do we merge it together and make one brand and through all of the research that we did in the customer insights we learned that there really was an affinity for both brands independently. So we positioned Hollister as the global teen brand and we grew up Abercrombie to really focus on this young millennial, this mid 25 mid twenties consumer and we got the response that we were hoping for and it's worked. What was the key thing that you had to do to make that happen? We had to really get close to the customer, you know, the previous management really focused on telling the consumer what they wanted and our big pivot was really making sure that we listened to the consumer and understood what they were looking for. So to become the iconic global team, we had to get close to that gen Z consumer, really understand what he and she were looking for. But the biggest unlock was an Abercrombie adult and what we figured out was that the 96 hour weekend that that consumer looks forward to every weekend, whether that's a weekend away with their friends for a wedding of that short party showers, whatever it may be or even a staycation dressing them for those 96 hours was the key unlock. They needed to have clothing for each and every one of the events that took place over 96 hours and that went from everything from Susie from Y PB, our latest franchise of your personal best which is an active wear through jeans and t shirts through getting dressed up to our BBg, our best dressed guest collection. So we really thought about 96 hours and created a collection that would support each of those activities. You also closed many stores, you remodel existing stores, you tone down that sexy, cool kids image of Abercrombie. Tell us a little bit more about how you reinvent a 130 year old iconic retailer, What's the secret sauce? You're right, that was a very big key component to our um to our journey. We like to say at Abercrombie today, it's about belonging in the past, was about fitting in and there's a very big difference to those two things. So previously it was about making sure that the consumer did what we wanted them to do today. We focus on what the consumer wants and that's about belonging. So we have really been able to make a very inclusive and diverse. Associate based, consumer based product based, we've extended our sizes are fit, we've done so many things to really evolve the brand and move it forward. And the consumer has responded incredibly well. You've also made a big push into digitizing your business? What have you learned about how shoppers want to shop? I mean now that they don't have a requirement to wear masks everywhere, do they like going more into the physical stores? Do they like doing um shopping online? I mean, which brings in the most business. We made it a tremendous hundreds of millions of dollars worth of investments. Prior to Covid and we were really leaning into our digital business, which is about a third of our business by the time we got through Covid, it's almost half of our business. It's really amazing, but very different by brand, the house, the consumer is still very social goes to the mall, loves to use that as their weekend, fun with their friends, the Abercrombie consumer who's this very busy young millennial spends their time doing something called Poppins, which is purchased online, pick up in store and they come in, they pick up their purchase, they make their returns, they use the store as much more as an opportunity as a um, a place to try on exchange, return quick and quick out and the house or consumer really uses it for social gathering. Terrific. I mean you've done amazing stuff. So what's left on your, the brands are healthy and they're moving forward. I'm so excited about our future. We had an investor day back in june and we shared our long range plan with the investor community. We have our sights in 25 on, you know, four billion plus and an 8% even margin. And we talked about our long term goals about being a global omni channel retailer. So I'm super excited about where we are and where we're going, you mentioned a moment ago you had your investor day, one of the things that you said at that gathering was that we expect macro headwinds to persist. Tell us a little bit more about your take on the economy. What worries you right now today? What I can tell you is, it's interesting to see what's happening with the consumer. He and she are actually fairly bifurcated. So Abercrombie brand had a terrific you to that consumer seems to be less touched by the challenges that are happening in in the world today. Um, yet the policy consumer, that teen consumer, that family, the demographic of that consumer, is definitely finding it much tougher. There's a lot of competition for the wallet, whether that's um gas prices or food prices and clothing. So we experienced for back to school, a much more judicious consumer, you know, really had to make choices this year. So it sounds like from what you're saying this holiday season could be a pivotal test on consumer spending. What's your strategy to make sure that Abercrombie gets a big slice of the consumers holiday shopping dollars? So our strategies have to have the right product at the right time, at the right price for our consumer. We are looking forward actually to the fourth quarter, you know, relative to last year's where we were really challenging an inventory perspective, not sure if everybody remembers, but we do a lot of production in Vietnam and Vietnam was closed at this time last year because of Covid. And then we had a big challenge getting our product here on a timely basis. In fact, a lot of it came after the holidays this year, we changed our straw strategy and we brought our inventory in early and we feel that we are ready and prepared to compete. Do you feel that you still need to offer promotions or cut prices? Listen, we made a lot of progress during Covid and we were able to really reduce our promotional activity and our goal is as we go into every single quarter is to continue on that strategy, we will obviously manage the business as it comes and we'll see how the consumers reacting. But we go in with a plan and a strategy to hold our markdowns and and promote as needed. I want to go back to something that you said or being, you know, a conversation about how good you feel about the turnaround that you created at Abercrombie. I mean you are coming up on your six year anniversary as a ceo, I mean what are you most proud of? Very simply, I'm most most proud of my team and the culture that I've created, we have created a culture where we took a talent that we had at Abercrombie and grew them and fostered them and we brought in a lot of new talent and we have blended Suzy this old team and this new team and put together one of the most winning teams in retail. It's not an easy thing to do. Um and we have a culture that really promotes inclusivity and diversity and influence and autonomy and accountability. I mean, we've come a we've come a long way from where I was when I first walked in the door. You're part of an elite group of female ceos who are running a big enterprise. What advice do you have for a young woman who has the ambition that wants to be a Ceo one day? What's the best advice on how to get there? Well, what I say to my team all the time is please make sure that you view me as a leader, not by gender. It's very important that everyone gets viewed by the experience that they bring in the success that they bring. So whether that's male or female at the same time, I do know that I am a role model and my advice is simply walk into that room, whoever is in that room and hold your head up high, be confident in what you're delivering and just go for it.