Why Abercrombie & Fitch Is Losing Its Teen Appeal

Abercrombie & Fitch was once the quintessential trendy teen brand. The chain bucked conventional wisdom by willfully rejecting the masses in favor of exclusivity. In a world of retail window displays designed to lure people in, Abercrombie told customers they weren't welcome unless they fit a certain mold. Like a hot club it blocked off the windows, turned the lights down low, and put up velvet ropes outside.

This attitude was no accident. "We go after cool kids," CEO Mike Jeffries told Salon.com in a 2006 interview. "A lot of people don't belong and they can't belong. Are we exclusionary? Absolutely." One part of being cool in Jeffries mind was being thin. Abercrombie & Fitch didn't carry sizes above 'large' or pants bigger than size 10 for women.

Unfortunately for Jeffries and Abercrombie, 2006 is a lifetime ago to the company's core customer base of teenagers. The back to school season was such a disaster for the retailer that it's been forced to consider the once unthinkable by offering larger sizes for women in a test run next Spring.

In the attached clip, Brian Sozzi of Belus Capital Advisors says it's too little too late. "They are fundamentally flawed company," Sozzi says in the attached clip. "The teen customer has moved away from the company in a big way, and that's a big problem." Jeffries' halfhearted effort to broaden the product offerings shows just how out of touch he is.

In the age of social networking, aloof isn't cool. It's just boring. Selfies and social networking are all about sharing and being inclusive and being part of a bigger community. There's nothing welcoming about a store that's roped off and seemingly guarded by a buff wall of "ab-tastic" teenagers. Abercrombie's sepia-toned ad campaigns with scantily clad teens romping around on beaches or in locker rooms aren't hip and inviting. They're just... creepy. "It's uncomfortable to shop (there)" as Sozzi puts it, "You don't want to go in there and talk to a (clerk) with your mom or your dad." Rest assured dads don't want their daughters talking to those guys either.

Forced to grovel to its customers with slightly expanded sizes and lower prices only makes Abercrombie look worse. It's long past time for the 69-year old Jeffries to be sent out to pasture in favor of someone with slightly more familairity with millennials.

Jeffries' contract runs out next year but Sozzi says there's no time to waste, and Wall Street seems to agree. Abercrombie & Fitch shares are off more than 30% in 2013. By Jeff Macke / Breakout