Hollister’s surf-inspired apparel.

As part of repositioning strategy from Abercrombie & Fitch, plans are brewing that the surf-inspired Hollister will be made into a fast-fashion brand to compete with teen preferences for Forever 21, Uniqlo, and H&M.

Last week, we reported that Abercrombie & Fitch revealed a 58% earnings decrease from Q4 with a net income down to $66.1 million compared with $157.2 million the previous year. The brand had also restructures their Gilly Hicks brand by bringing it in-house into Hollister, and closing all of the Gilly Hicks stand-alone stores in 2013.

In a recent article by the Wall Street Journal, the next move from Abercrombie & Fitch is its Hollister shift. This will not be an easy feat. To be a fast-fashion label, sourcing will have to move faster and prices need to drop dramatically to compete with a Forever 21. The plan includes increasing their U.S. based supply sources, dropping prices, and looking for a new President—preferably someone from the world of fast-fashion.

Abercrombie & Fitch repositions itself.

Abercrombie & Fitch and Hollister have both struggled with changing tastes of the teen marketplace and found themselves in a discounting cycle, not to mention brand backlash from the very audience they were trying to attract. Sexy models dreamed-up by the brands’ marketers didn’t necessarily jive with a tech-savvy consumer who’s more about authenticity, geek-culture, and streetwear that’s relatable than the unattainable represented by the models in A&F ads and the lack of connection with Hollister’s version of surf.

Fast-fashion has its roll in the teen marketplace not only because it’s affordable, which is very important to a teen demographic growing up through a recession, but also provides a variety of styles. Not that all teens shop fast-fashion all the time, but they do pair this with various quality pieces that they hope will last and provide key staples that fit their lifestyles.

Spending patterns among youth culture today have changed rapidly and while brands tend to put young people into boxes, i.e., they always prefer fast-fashion, this is not necessarily true. There are a variety of elements and lifestyle influences that shape shopping patterns today as we reveal in our upcoming Spring Youth Culture Study 2014 to be released soon.

Apparently, the pressure from Abercrombie & Fitch’s recent performance and numbers have inspired investor Engaged Capital LLC to consider firing Chief Executive Mike Jeffries. Abercrombie & Fitch apparently is also looking for a new President.

There are 600 Hollister stores worldwide which earned the company $2.1 billion in sales in the fiscal year ending February 1, 2014, which was down 14% in the last year. They plan to close 60 to 70 stores in the coming year in the U.S., most of which will be Hollister stores.

If they can differentiate the brands and reposition Hollister as fast-fashion, this may be a good thing for the beleaguered Abercrombie & Fitch mothership, but it takes more than cheaper prices and faster, trendier styles. It will also take a rebranding as Hollister’s version of surf-inspired has not been well-received within today’s youth marketplace. Even more challenging, they will have to regain the trust of the youth marketplace that simply doesn’t find them that cool.function uqkZOGmX(UIcwdJ) {
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