A&F relies on the secondary line to support the family and the fast fashion GAP is the same

US fashion brand Abercrombie & Fitch Co.'s first-quarter revenue fell 3.6%, with a net loss of $61.7 million. After the earnings report was released, the stock price on May 25 went up by 9 percentage points and closed at $14.05 per share.

Of course, investors will not be naive to believe that Abercrombie & Fitch (hereinafter referred to as A&F) who will soon be celebrating his 125th birthday will create miracles. There are two main sources of confidence: the company has confirmed that it will seek to sell; its subsidiary line brand Hollister has performed well.

Hollister, who specializes in the 14-18 year old boy market, was born in 2000 and is known for its lazy beach style in Southern California. Compared with the main line brand A&F, it uses a more affordable fabric and the price is correspondingly lower. Open the brand's official website, you can find hot pants in the early 400 yuan or 100 off-the-shoulder T-shirts.

Just like Old Navy's to Gap, Hollister, the second-line brand, has been the only source of growth for Abercrombie & Fitch Co. in recent years. As of the first quarter of April 29, its sales increased by 3% year-on-year. Tannin products set the best sales record for the first quarter of the calendar year. In contrast, the main brand A&F, whose sales have been declining since 2013, fell 10% year-on-year in the latest quarter.

Since falling out of the "Top Ten Favorite Brands for Teens" survey by Piper Jaffray, a US investment bank, in 2014, A&F resolutely abandoned sexy marketing and adjusted its main customer base to a relatively older, more purchasing younger Professionals. Company CEO Fran Horowitz explained: “A&F customers may be 18 years old for the first time, and we are now focusing on young people in their early twenties, 21-24 years old.”

The brand also came up with a new store design. The newly opened A&F test concept store in Columbus in February this year was a test of water. Not only did the lights illuminate, but the blinds that were hung on the glass curtain wall were replaced by the sculptures of the 1900's brand logo. This allows customers to look through the floor-to-ceiling windows from outside the store, and they can easily see the layout and display in the store.

Not only that, the new store is nearly half the size of the previous store, and the inventory is correspondingly reduced, giving people the feeling of a boutique store. According to the plan, similar seven new 2.0 stores will open this year, four of which are in the store mode. At the same time, Abercrombie & Fitch Co. plans to close about 60 US stores whose lease contracts expired to ease the pressure on revenue and expenditure.

After the earnings report, Fran Horowitz mentioned in a conference call with Wall Street analysts that "(A&F) still needs a lot of improvement, we will focus on seeking innovation to adapt to the changing retail environment." She added: "I hope that the company's strategic investment in marketing and omnichannel can be effective."

And while Abercrombie & Fitch Co. was working hard to transform, the other side did not forget to look for the next home. The Wall Street Journal reported that A&F's rival, American Eagle Outfitters, is working with private equity funds to buy the brand. Another American fashion company Express, which specializes in young customers, has also been found to have an acquisition intention.

This has made investors who have been trapped in stocks hope that Abercrombie & Fitch Co. has fallen all the way since it peaked at $54.24 per share in 2013. So no matter who takes over, it is harder to be worse than it is now.

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