Abercrombie & Fitch and Hollister -Betting that Selling Southern California Lifestyle Works Better Abroad

Not too much is yet known just how Abercrombie & Fitch, the retailer that also owns Hollister and has been quite competitive with surf brands when it comes to selling the “Southern California lifestyle” is going to expand internationally, but that’s where CEO, Mike Jeffries said things are headed. While it’s no surprise that they had to shutter the RUEL brand (29 stores), we are curious about their belief that international is going to be a good move in the near future (A&F owns 349 stores and 508 Hollister stores). While selling the southern California lifestyle isn’t necessarily the hottest trend in North America right now, it’s still riding a new wave of popularity in other countries that are just tapping into a certain sense of youth culture independence and action sports.

As of July 9th when Abercrombie & Fitch’s June reports sales were announced, the brands have taken a hit: on July 4th, net sales for June 2009 were $230.4 million, which is a 26% decrease from $309.7 million last year during the same time frame. June comparable store sales dropped 32%, with direct-to-consumer sales dropping 17%. Year-to-date, the company net sales decreased 25% to $1.025 billion from $1.343 billion last year.

Hollister, the surf-inspired store that many in action sports feel most threatened by (while they should probably be more concerned with Uniqlo, H&M, Forever 21, Hot Topic, American Apparel, and others), dropped 35% in comparable same store sales.

Meanwhile, the new Hollister store in SoHo which opens July 16th is still the hype. The design is intended to make it look like you’re walking down Huntington Beach pier. For those of us headed to the U.S. Open of Surfing in HB starting July 18, it’s a bit distrubing to think a similar plan is launching in Gothem City. It’s called “EPIC” Hollister in case you were interested in checking it out. The store also will feature sound such as waves, and various scents, and touch features. If all goes as planned, this could very well be an epic EPIC store. New ideas in retail design are always worth checking out.

Uniqlo%uFFFDs sneak peak at J collection

Uniqlo Launches J Collab with Jil Sanders
Uniqlo, the fast-fashion retailer owned by Fast Retailing Co. from Japan that’s currently invading the USA and doing quite well (reported increase of net sales by 17.2% as of end of May, 2009), has finally launched it’s J collection created by designer Jil Sander. This much-anticipated collection reflects the Uniqlo sense of style incorporating simplicity in design, quality, but at prices that seem very, well, fast-fashion-like.

Jil Sander’s J collection features 40 pieces for men, 100 for women, and accessories. Expect T-shirts, knitwear, jackets, button-downs, coats, and accessories. So far, the only thing Uniqlo is showing in this top-secrete sneak peak is a tailored white shirt and J logo. The hang tag on each piece says “Basics are the common language. The future is here: J.”

In other Uniqlo news, rumors still swirl that the brand may consider acquiring The Gap. Tadashi Yanai, the Japanese director behind Fast Retailing said about the rumor, “it’s not such a crazy idea.” Uniqlo is reported to be looking for an acquisition.

Meanwhile, the opening of Uniqlo stores is doing well especially in Shinjuku West Exit Store, mainland China, South Korea, and a recent opening in Singapore.

Zumiez Dives Further
On the flip side, Zumiez, the action sports-inspired retailer, is hurting with a reported 19.3% same store sales drop last month to $32 million. This supposedly did not surprise analysts, which, translated via current economic reporting trends today, means it’s sort of a good thing. (Remember, flat growth is the new “up” and lesser bad news than predicted is “good” news.)

Hot Topic Takes a Hit But Music Tour Season Has Started So Stay Tuned
Hot Topic also lowered expectations with same store sales for June, 2009 falling 7.9% which was more than expected. However in comparison, Hot Topic still does fairly well in youth culture markets, and we anticipate a better reporting next quarter given that all the hot music tours have officially launched. Hot Topic is also a main sponsor of the Rockstar Mayhem Fest which kicked off July 10 featuring metal bands such as All That Remains, Bullet for My Valentine, Slayer, and Marilyn Manson (stay tuned for full story).

K-Swiss Launches Skate Division
And finally, K-Swiss shoe company has announced the official launch of their very own skateboarding division, headed up by skateboarding great, Greg Lutzka as creative director. In the very competitive industry of skateboarding footwear, K-Swiss’ decision now seems a little late to the game, but given some of their various campaigns in the past, it could be a good strategic move as footwear, especially in sports-inspired sneaks, is fairing better on the retail front than other industries in this economy.