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After Bad 2013, Abercrombie & Fitch Tries to Rebound

Retailers look to Christmas to end the year on a high note, Central Ohio based Abercrombie and Fitch is just looking to get this year behind it. The New Albany based retailer still has its iconic brand, but 2013 has been a tough year as sales and stock values have dropped. For 20 years, Abercrombie and Fitch has been one of THE names in fashion. Teen models, edgy commercials, and catalogs of bare chested models brought controversy, but also attracted young shoppers. This year has been different. Sales are off by 12%. The company's stock price is down 30%. That's a problem for any retailer, but Ohio University marketing professor, Ann Paulins, says it's a big problem for one that caters to fickle teenagers. "I think the company is in trouble," says Paulins. "The stock is down from, over the past year. That's substantial, one third, approaching one third of its prior value. That's a problem. " The falling stock price led to Abercrombie being dropped from the S & P 500. Much of the trouble stems from a seven-year old controversy, given new life this spring. In May, a 2006 interview with company Chief Executive Michael Jeffries re-surfaced on the Ellen DeGeneres talk show. While it sounded fresh, the quote was made in 2006.. and the quote was not entirely accurate. Jeffries told Salon.com - quote - We want to market to cool, good-looking people. We don't market to anyone other than that." But the story stuck and went viral on social media and promoted protests. 17 year old Chicago area teen Cali Linstrom led one. Linstrom says she was a victim of harsh bullying. She organized a protest in front of Chicago Abercrombie and Fitch store "At first, I was like they're going down I do not want this company to be saying this to young people or getting this message out there and their sales and their stock was hurt," says Linstrom. Linstrom spoke at Olentangy High school, and got students like freshman Nhu Do talking "I think it's just rude," says Do. "I don't agree with what he says at all and it puts girls down like about how they feel about themselves and they're body image and stuff." Abercrombie and Fitch quickly responded to the May protest. CEO Jeffries issued a statement saying he regretted his choice of words. But the financial damage lingered. In August, Abercrombie reported another sales loss which it blamed on "softness in the female business." Fewer young women were visiting A-and F stores. Investors showed a loss of confidence. The stock price fell in one month from about 50 dollars per share to 35 dollars per share. It remains in the low 30 to 32 dollar range. Abercrombie invited Linstrom to its New Albany headquarters saying they heard her message of inclusion. "You know I met Mike Jeffries and it was kind of strange to see that he knew who I was and like, I kind of caught his attention," says Linstrom. Abercrombie expanded its 'Diversity and Inclusion' department and earlier this month announced they will sell larger sizes of women's clothing. Whether the company's efforts will result in a financial turnaround remains an open question. Paulins says in the controversy, Abercrombie may have missed the fashion market. "Fashions go in and out in terms of a cycle. So, when the hottest, latest, greatest thing is Abercrombie and Fitch one year. It's highly unlikely that that staying power is going to continue because the fashion will have been played, the cool, college, campus, preppy, affluent, you know, is perhaps a bit played." In fact, Abercrombie sales have declined now for nearly two years. The slump brought calls from one investor to oust Jeffries as head of the company. Jeffires survived, but he's working under a new contract. To recover, Abercrombie will have to convince more young shoppers like Maria Foley to give the company and its top executive another chance. "I read it and I was outraged and I went in during Black Friday and I didn't buy anything 'cause I remember like the comments he made and I was so mad about that," says Foley Paulins says Abercrombie's experience this year illustrates both market and social hazards faced by retailers who cater to teens. "Retailers are not entitled to a future in our American marketplace and they will need to respond to demands of consumers," says Paulins. Abercrombie and Fitch declined a request to be interviewed for this story.