Abercrombie and Fitch – A Case Study

Target market

Abercrombie and Fitch is one of today’s most popular clothing companies that cater to American’s youth culture. Abercrombie and Fitch clothing is worn by children and young adults, but is largely marketed to the college-age population. Abercrombie and Fitch have been in existence since 1892, beginning as an outdoors sporting goods supplier. Today, A&F stores can be found in malls across America and the A&F logo is easily seen on any high school or college campuses. Abercrombie and Fitch clothes are even worn by cast members of the hugely popular television show, friend.

The company claims 18 to 22 year olds as it target market, but it’s marketing appears to be aimed at all teens in general. The claim of a college-age target market is likely designed to counteract backlash form its erotic “shockvertising”. Abercrombie and Fitch recently introduced toned-down “Abercrombie” stores with a target market of 7 to 14 year olds. Abercrombie and Fitch have received both positive and negative publicity as a result of its target market. Abercrombie’s positive publicity is mainly due to the positive reaction of 18 to 22 year-olds. Alternatively, Abercrombie’s negative publicity is attributable to parents, legislators and consumers advocates. Such individuals feel that the Abercrombie’s depiction of the American college experience is not seen as responsible by growing number of parents and lawmakers, especially because the company’s message are reaching children under 18.

Competition

As the company struggle to capture its target market, they are also face with major competitors. Abercrombie and Fitch primary competitors are Gap Inc, Banana Republic, Old Navy, and J Crew. Brand positioning due to the nature of the retailing business, Abercrombie and Fitch must and had been constantly focus on the customers needs with high levels of service on order to capture, create, and retain a competitive advantage. Ultimately, brand image, service and quality are the winning criteria for Abercrombie and Fitch. Their competitive advantage stems from their ability to communicate these qualities to their customers successfully, while also maintaining high profit margin. Many retailers, including Gap competitors Abercrombie & Fitch and American Eagle have also experienced ugly first-half results, especially in the same-store sales category.

Social, legal, and regulatory issues

The Asian Pacific American Resistance & Empowerment Network (APAREN), a national collective of progressive Asian Pacific Americans (APA), denounces Abercrombie & Fitch for its racist actions directed toward Asian and APA communities.

A recent line of t-shirts sold by the major clothing retailer displayed racist slogans and caricatures, depicting stereotypes of APAs with the intention of being funny. The shirts alluded to the stereotype that Asians cannot speak proper English by using bad puns; the illustrations were simple rehashing of old stereotypes. One shirt even had a caricature of the Buddha with the slogan “Buddha Bash: Get Your Buddha on the Floor;” Another Abercrombie & Fitch shirt, which is reportedly still being sold by the company, features the Chinese name of Li Hong Zhang (also known as Li Hung-chang), a Chinese official in the late 1800s well known for his weakness when dealing with European governments. This is certainly the product of research done in order to come up with a name that would embarrass people of Chinese and Asian descent.

The fact that Abercrombie & Fitch has not taken responsibility for selling racist shirts indicates the company obviously does not understand the issues at hand. Regardless of its specific reasons, the behavior of this massive company indicates racism at the highest levels of its corporate ladder.

Although some of the shirts were pulled from the stores, the company released a statement saying the company “thought Asians would love” the shirts, a blatant indication that the company lacks basic sensitivity toward minority communities. At rallies at Abercrombie & Fitch store in different cities, protesters have been harassed, threatened and racially profiled by security guards. All of these practices are illegal, but somehow it seems a large portion of mainstream America supports the company’s racist and illegal practices.

The egregiousness of these products no less than proves that the company’s intention was to offend APA communities. The company is not merely stupid or ignorant as many had believed, but it is unquestionably malicious toward communities not in their target market. At best, Abercrombie & Fitch intentionally exploited stereotypes of Asians and APAs to increase foot traffic in their stores out of curiosity; at worst, the company perpetrated racism because they thought insulting a disadvantaged community would be funny.

Not only has Abercrombie & Fitch intentionally offended the APA community, but also continues to mindfully exploit laborers of color – mostly of Asian or Pacific Islander descent. APAREN condemns the company for this practice in Saipan, a U.S. commonwealth in the Pacific Ocean.

APAREN joins other members of the APA community – including a broad coalition of APA college students – in urging all APAs and decent people not to support Abercrombie & Fitch. Do not purchase their products or visit their website; do not work for an Abercrombie & Fitch franchise. Its actions have not only been morally reprehensible, but also racially motivated, disproportionately affecting Asian and Pacific Islander communities in this country and elsewhere.

A lawsuit filed in federal courts in recent weeks reportedly states that “Abercrombie discriminates against blacks, Hispanics and Asians by enforcing a nationwide corporate policy of preferring white employees for sales positions, desirable jobs and favorable work schedules (Mattei 2003).

The allegations, initiated by nine Hispanic and Asian plaintiffs who were employed by the retailer, claim that the company requires its sales people to exhibit an all-white “A&F look,” posts store advertisements that feature mostly white models, and typically hires minorities to work stock room and overnight jobs (Mattei 2003)

According to a reporter (Jacob Anderson).

If you look at the material they put out, they are cultivating an all-white look. It is difficult to understand why, given that their target age demographic is even more heavily minority than the rest of the population, they would choose to do this.

In other words, Abercrombie and Fitch, a constant winner in the voluntary “dollar-vote” elections of the market, is accused of being an intensely racist company in both its employment practices and its product marketing.

Regardless of the intentions and supposedly prejudice nature of Abercrombie and Fitch’s corporate policies, and the steps it may or may not take in making employment and marketing decisions, the lawsuit brought against the company is an embodiment of either misunderstanding or old-fashioned ignorance.

Clearly, this case is characterized by the same absurdity that all discrimination lawsuits and legislation share, a failure to recognize the nature of individual preference and the harmonizing activities in the free market.

Although many individuals will not hesitate to deny it, everyone discriminates on a daily basis. The fact of the matter is that discrimination is nothing more than the active demonstration of preference. Human interaction has been composed of discriminatory actions since the dawn of the race. Individuals make decisions and act on those decisions based on what they perceive to be most beneficial to them at a specific point in time.

One may choose coffee over tea, or enroll in an economics class over a sociology class based on their preference, clearly discriminating against the other. Likewise, an individual may wish to apply for employment with a particular company while a decision-maker of a company may wish to hire a particular individual corresponding to their perceived benefits. Discrimination is the fundamental exhibition of liberty, an individual’s ability to make decisions and act out in accordance with those decisions.

In the free market, companies that discriminate irrationally struggle to survive and sometimes perish. When one discriminates, one inherently limits the alternatives made available by ruling certain alternatives out of the decision-making process, regardless of the potential that may lie in that alternative. Applied to employment, the company that chooses to hire employees based on unmerited discrimination instead of utility or productivity will surely fail to maximize profits.

For example, suppose two individuals with differing levels of quantifiable productivity apply for the same position at the same point in time. All things being equal, from the economic perspective, hiring the more productive individual would be advantageous to the company. Should the company, however, choose to employ the less productive individual, it will not realize profits as high as those brought about by employing the more productive individual.

Discriminating against customers, in any way, further hampers profitability. For the company, loss of profit is inevitable, as it has reduced its pool of potential customers, be it through marketing products to some persons and not others, or prohibiting individuals of a particular demographic from patronizing the business. When a business discriminates against customer’s eager to satisfy their demands with the product that the business sells, the business is essentially refusing revenues.

In essence, the irrationally discriminating seller is creating an opportunity cost where it need not exist. Given this economic truth, one can see how Wal-Mart and other notably prosperous companies have achieved their success–they cater to virtually every customer in the market for virtually every product. Lucrative businesses are such not simply as a result of satisfying consumer needs, but also because they recognize that satisfaction of the greatest amount of consumers is necessary to maximize profitability, and therefore realize that discrimination would be detrimental.

Another issue not to be overlooked in an analysis of discrimination is the reputation a discriminator may create for itself. A reputation, the opinions individuals have about another person or entity, is formed out of the personality or behavior perceived to be characteristic of that person or entity. The discriminator may find itself discriminated against accordingly if other individuals are critical of discriminatory conduct and do not wish to be associated with such an entity. In the market for goods and services buyers typically discriminate against sellers based on the products they offer, the bundle of benefits a buyer perceives in purchasing from a particular seller. Included in this bundle of benefits is the overall character of the seller, which may be of interest to a buyer.

Given the position that an irrational discriminator puts itself in through both its own biased ways and the resultant reputation that may cause discrimination towards it, one can conclude that any entity which practices excessive, unmerited discrimination would certainly struggle to survive in the free market.

A ruling in favor of the plaintiffs in the Abercrombie and Fitch discrimination case would no doubt bring many more lawsuits of the like before the courts. The fact of the matter is that there would be no difference between this particular case and a case brought by a Caucasian against FUBU for its “all-black” look, or a male against Victoria’s Secret for catering to women, or an elder against The Gap for not favoring the elderly. Basically, discrimination is in no way, shape, or form criminal, rather, it is nothing more than the exhibition of preference, which is legal in a society that calls itself free.