According to the New York Post, which we all know as a bastion of editorial integrity and truth (I read it for Paris Hilton updates), retailer Abercrombie & Fitch (NYSE:ANF) is secretly preparing to launch another brand. The new concept will reportedly challenge preppy J. Crew and Gap's (NYSE:GPS) chic Banana Republic. The Post even discloses a code name -- "Concept 4." Ooooo, sneaky.
Not.
As far back as June 1999, Abercrombie & Fitch was telling our own Dave Marino-Nachison that it eventually envisioned operating five different concepts. We saw "Concept 3" in 2000 with the company's Hollister chain, targeting a younger demographic at a slightly lower price point. And Abercrombie already operates its flagship stores and its abercrombie children's chain. That leaves, yes, "Concept 4" and "Concept 5."
Analysts have repeatedly questioned Abercrombie's management during the retailer's conference calls about Concept 4, but beyond acknowledging that it's working on something, Abercrombie hasn't given up the goods. On our Abercrombie & Fitch board, the topic's been a frequent subject of discussion and speculation.
Fools have mentioned time and again that the idea might be a chain to clothe Abercrombie's customers as they leave their college years. It's a logical fit. Where else, really, does Abercrombie have to go? It's already reaching the pre-teen, teen, and early 20s demographic. Unless we're talking Thongs for Tots -- and I don't think even Abercrombie would go that far -- bumping up its customer focus by a few years is hardly a stretch.
Sure, back in 1999 Abercrombie said, "Our plan is not to grow old with our customer. We think that the sweet spot for us is the 18-to-22-year-old college student." Things change, though. Opportunities present themselves, and who can blame the company for deciding to back away from that.
If Abercrombie can translate the feel and look of its clothes into something that young professionals can wear to the office (awww, on their first big boy jobs!), it may be able to hang on to customers that otherwise jump ship to J. Crew or Banana Republic.
What it really comes down to is that this story's still just speculation, and not even shocking or rank speculation at that. I expect so much more from the Post! Anyone who has been following the company could have come up with this. Indeed, Fools have been talking about it for some time now.
LouAnn Lofton owns shares of Abercrombie & Fitch and Gap. Check out the Fool's Abercrombie & Fitch discussion board to share your thoughts about the company.
