Abercrombie & Fitch: Case Study Exam

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Case Study
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The activities, sales, and profits of Abercrombie & Fitch are likely to be influenced by the macro-trading environment in which it operates. A&F tends to play it on the safe side when it comes to making macro-trading investments. …

Introduction

For instance, A&F chose to mark up their prices when they expanded into the UK. However, their profits were affected when individuals in the UK’s macro-trading environment noticed they could order A&F products via the USA website for much cheaper and were angered. Another example is the complaint mail and lawsuit threats that A&F received for their racy and explicit ads. There, the activities in the micro-trading environment of A&F were influenced as the company decided to take measures against the complaints. There are several major macro trends that are impacting on A&F’s sales performance in the UK. The first is the economic trend of high cost of overhead. Secondly, the products are being sold at a considerable mark-up from United States prices, which is a competition trend. Third, a social trend is that the fashion scene in the UK is similar to that in the USA, but must also be followed carefully to ensure that the products that hit the stores are the ones that customers want. The fourth is a social trend mentioned in the case brief is that UK customers are attracted by that souvenir appeal. Customers previously would only buy A&F merchandise on a visit to the USA, and this is affecting the company’s popularity now that they have moved to the UK. ...
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