Denim options will be key to both Abercrombie & Fitch Co. and American Eagle Outfitters Inc. in the months ahead when the back-to-school season begins.
For now, both brands have been working on broadening their fashion offerings. They’re each at different points of their lifestyle journeys. And while core Abercrombie is further ahead on its lifestyle cycle than American Eagle, denim continues to have a key role in the assortment mix at both brands.
Abercrombie & Fitch
“In denim, specifically, we are seeing some new trends happening, which is exciting,” Fran Horowitz, Abercrombie’s CEO, said during a conference call to analysts on Wednesday after the company posted first-quarter results.
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“The rise is actually going back down a little bit. So this low-rise baggy is coming in pretty strong. Wide-leg jeans are happening,” she said of the trends at the retailer’s core Abercrombie brand, which targets young adults in their 20s all the way up to their 40s.
But the specialty chain has also been switching things up for the past several years, broadening its assortment mix for a better balance as a true lifestyle brand. It’s also a move that has helped the company grow its customer base.
In the first quarter ended May 4, the specialty chain launched The Wedding Shop, which included a curated set of dresses and other apparel for customers seeking options from bachelorette parties to honeymoons to the big day itself. The Wedding Shop is a successful extension of our best dressed guest collection, which has been a part of the assortment for a few years,” Horowitz said.
At its teen brand Hollister, which struggled last year, the company saw progress at both its women’s and men’s categories. “The men’s division returned to growth, led by fleece tops and bottoms as well as pants, which all did well throughout the quarter. Women’s contributed nicely to the growth acceleration with balance across categories,” Horowitz said.
The turnaround in men’s was faster than initially expected, helped by a big acceleration in the tops business, she said. While the bottoms business has had significant success over the past several quarters, a new trend also shifted the focus in tops.
“Excited to see that there’s a proportion happening and changing a bit in guys. They’re wearing these baggier jeans that involve looser tops different proportions,” Horowitz explained.
American Eagle
Over at American Eagle, although still primarily a denim-focused brand, the company’s core American Eagle banner—it also operates the Aerie intimates brand—is also broadening its mix, with “positive customer response as we look to capture the social casual dressing occasion and a wider age demo,” Jennifer M. Foyle, the company’s president and executive creative director of American Eagle and Aerie.
She explained that the company was “very single noted, and it was time to rebuild that lifestyle that the customer was demanding from us. And wow, those results have been better than expected. And so we’re going to continue to expand in those adjacencies.”
For its first quarter ended May 4, women’s tops wer a key driver of growth, helped by strength in dresses, skirts and jeans. Men’s saw strength in pants, knit tees, sweaters and outerwear, she said, adding that “we are seeing nice momentum in AE 24/7, our men’s activewear collection.”
In the quarter, the company promoted its spring denim collection and capitalized on the Western trend through a leveraging of influencers and organic content to build awareness across social channels. “As we approach back to school, we look forward to the relaunch of the brand platform celebrating AE’s heritage of self-expression, individual style, acceptance and, of course, optimism,” Foyle said.
She said causal dressing remains a key component of American Eagle’s customers’ wardrobe, which provides a natural tailwind to its business. “We continue to dominate in jeans. I believe there will be tailwinds there. We’re seeing early trends, particularly in women’s, and the assortments look great for back-to- school and onward,” she added.
She said that for third quarter denim options, there will be more new fits to help drive the assortments: “I think we’re about to head into a cycle, which is obviously a winning category for us. It’s our dominant category. We’re dominating it.”
And while the retailer will always have offerings to serve its core customers, she said the broadening of the mix is due to the focus on how to get that customer to “stay with us. And thinking back to our strategy that we put forth, we want to offer new occasions, core occasions, social casual, men’s active, everyday casual.”
Known as a teen brand, Foyle said data shows customers are staying with the brand as “we’re actually seeing the next bracket of the age group actually increase slightly,” noting that in the past customers jumped out at a certain age.
Regardless of age, the core category that remains a mainstay at American Eagle is denim.
“Denim is ageless, our core competency business. And as we offer new fits, we’re getting customers—new customers—because we were so focused on one fit in the past, particularly in women’s,” Foyle said. “I think now that we’ve broadened that assortment, we’re getting more and more customers.…So I like that we might be having some tailwinds in this category.”
