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Low-rise jean-wearers, you\u2019ve been right all along. Not only has the style returned from its two-decade slumber, but so, too, has one of its most storied purveyors.<\/p>\n
Abercrombie & Fitch, the clothing retailer beloved in the 1990s and early 2000s, put an emphatic stamp on its comeback, posting its best first quarter in company history. The company reported $1 billion in net sales, a 22% leap from last year, far exceeding expectations. Sister brand Hollister saw a 12% growth in comparable sales, and Abercrombie\u2019s shares were up over 20% to $187 on Wednesday.\u00a0<\/p>\n
\u201cWe successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations,\u201d CEO Fran Horowitz said in the earnings report<\/a>.<\/p>\n The company owes its blowout numbers to savvy clearance sales, a pull-back on promotions and inventory, and its grasp on what\u2019s in vogue, like the wide-leg, low-rise jean. But its more profound success\u2014which propelled a 285% stock growth that exceeded even AI darling Nvidia<\/a> in 2023\u2014has been thanks to a seven-year transformation of Abercrombie\u2019s brands and a deep understanding of changing post-pandemic cultures.<\/p>\n Before Abercrombie soared to retail royalty, it first hit rock bottom. In 2016, the company was deemed most-hated retailer<\/a> by the American Customer Satisfaction Index, as its consumers outgrew the perfume-weighted air in stores and hypersexualized models and were put-off by the company\u2019s slew of controversies<\/a>. When Horowitz took the helm in 2017, she brightened the stores and revamped their inventories, expanding sizes and focusing on dressing young professionals for all parts of their lifestyle\u2014a shift that fit with the post-COVID trend of casual dress.\u203a<\/p>\n \u201cWe grew up Abercrombie,\u201d Horowitz said in a 2022 Fortune<\/em> interview<\/a>. \u201cWe really focused on this young millennial, this young, mid-twenties consumer, and we got the response that we were hoping for.\u201d<\/p>\n While Abercrombie has soared above competitors, it also represents a beacon of hope<\/a> for other apparel retailers that were once stalwart mall brands. Both American Eagle and Gap<\/a>, with earnings this week, are expected to continue<\/a> Abercrombie\u2019s positive trend, albeit without the same magnitude.<\/p>\n The good fortune is reaching the retailer\u2019s mall-adjacent relatives. Sporting apparel mainstay Dick\u2019s Sporting Goods raised its full-year earnings guidance<\/a> after reporting Wednesday a 5.3% jump in comparable sales for the quarter thanks to more people buying shoes and athletic gear. Discount department stores Ross Dress for Less and TJ Maxx posted sales gains last week<\/a>, as young shoppers looking to save money flocked to the stores.<\/p>\n Neil Saunders, managing director of retail at analyst firm GlobalData, told Fortune<\/em> that these companies, while they share similar settings, have found success simply because they understand their own discrete consumer bases.<\/p>\n \u201cIn the case of TJ Maxx, it\u2019s about value for money and providing those great bargains and great price points for the brands people want to buy,\u201d he said. \u201cFor Dick\u2019s, it\u2019s really about having all of the latest sporting brands under one roof and taking some share for more casual apparel from department stores.\u201d<\/p>\n Indeed, department stores have withered<\/a> because of the rise of e-commerce and the proliferation of direct-to-consumer brands. Macy\u2019s is in the midst of a restructuring effort, closing 150 locations<\/a> this year to make way for its luxury subsidiaries. Kohl\u2019s and Nordstrom<\/a> have likewise struggled to appeal<\/a> to young people. Analytics firm Coresight Research projected<\/a> that by 2026, U.S. department store sales will have plummeted 21% from $103 billion in 2018 to $81 billion.<\/p>\n Even with nostalgic mall brands like Abercrombie making a comeback in the face of the department store decline, Saunders argued the rise of these mall and mall-adjacent favorites do not mean the shopping complexes of the \u201890s and 2000s will return with the same fervor. In reality, there\u2019s just a collection of brands that happen to be the mall darlings of yesteryear that have found ways to stay relevant.<\/p>\n \u201cIt\u2019s not really a comeback of the mall per se,\u201d Saunders said. \u201cIt\u2019s a comeback of some particular brands that are doing the right thing.\u201d<\/p>\n<\/div>\nWill peeps once again chillax at the mall?<\/strong><\/h2>\n