Abercrombie is Taking Us Back to the Mall

When was the last time you stepped foot in an Abercrombie & Fitch store? For most of us, it's been a while. The once ubiquitous mall brand had faded into obscurity - written off as a relic of the past. 

But Abercrombie (ANF) has pulled off one of the most surprising retail turnarounds in recent memory. Its stock price has surged an astounding 40% over just the last six months, resurrecting this dormant '90s staple.

Abercrombie has gone from stale to stylish almost overnight - defying all expectations that it was destined for the clearance bin. How did this left-for-dead brand suddenly come back to life?

They Must Be Selling a Lot of Cologne

Much of the credit goes to CEO Fran Horowitz. Known in the past more for overpowering cologne sprays than smart leadership, Abercrombie has transformed under her guidance. Horowitz led a top-down revamp covering everything from product assortment to store experiences to redefining the very essence of the Abercrombie brand.

On the product front, Abercrombie ditched its exclusionary preppy styles and hyper-sexualized marketing campaigns. In their place came inclusive, on-trend designs tailored to today's youth. Denim shorts now ride the line between trendy and timeless—unlike the ultra-low-rise pairs of decades past.

Walk into an Abercrombie today, and you'll be greeted with light, not darkness. Stores bathed in blackness were suddenly flooded with illumination, allowing shoppers to actually see the updated styles. Out went the cramped, cluttered floor plans. In came an airy, minimalist aesthetic.

And the Abercrombie brand itself got a reboot centered around equity - a far cry from the discrimination and toxicity of the past. No more shirtless models or discriminatory hiring practices. Abercrombie is growing up.

The Share Price Is in Line with Their Jeans

This multifaceted overhaul has clearly resonated with consumers and investors alike. Abercrombie's stock has not only grown but also sustained a healthy PE ratio of 23.91. Compared to struggling retailers like Gap (GPS), this is a robust figure suggesting strong investor confidence in the brand's revival.

The numbers validate that confidence: Abercrombie has posted consistent sales growth quarter after quarter, with profit margins handily outperforming Wall Street projections. Sales are up by double-digit percentages, and some competitors like Levi Strauss (LEVI) are also starting to see a resurgence. 

Their success proves that strategic vision matched with flawless execution can bring a company back from the brink.

Does That Mean Hollister Is Next?

If Abercrombie can stage such a dramatic turnaround, could other languishing mall brands potentially follow their blueprint? One prime candidate is Hollister - a one-time pop culture phenom now fading into obscurity.

Though still under the Abercrombie & Fitch umbrella, Hollister has lost the luster of its heyday. But just as CEO Fran Horowitz engineered Abercrombie's revival, she could replicate that success with Hollister.

With the right product overhaul, store revamps, and brand repositioning, Hollister could tap into millennial nostalgia while modernizing for today's youth. (Think updated skinny jeans, beach-inspired accessories perfect for TikTok, and sustainably sourced hoodies.)

And with Abercrombie's stock flying high, the time could be right to dust off other dormant brands in its portfolio.

Investor Takeaways

Abercrombie's astonishing comeback shows that the retail renaissance is real. With the right blend of leadership, strategy, and execution, Hollister could be the next blast from the past to find new life.

For investors, Abercrombie offers a compelling story combining stability and growth. The revived brand has rediscovered its core identity after years of wayward experimentation. For value investors, Abercrombie offers an underappreciated turnaround story with improving fundamentals. And for growth investors, the opportunity still remains early after this first wave of success.

With its stock up 40% in just six months, Abercrombie is back—and still looking stylish. Value and growth investors may want to take a fresh look at this revived mall mainstay.

Stocks.News does not own positions in companies mentioned