"Wow, look at Abercrombie & Fitch (NYSE:ANF) go." You've likely heard similar sentiments from some retail watchers over the last year or so, as they watched Abercrombie's stock price zoom. I have to give my Foolish colleague Seth Jayson lots of credit for his great calls on Abercrombie. It was his Halloween Treat back in October 2004, and againthis year. Not bad at all.

But while Abercrombie may be a stock market hottie right now, if you're new to the retail industry, you might not realize that it hasn't always been so popular.

Tough times
Flash back to October 2003, when Abercrombie was really struggling. (Read this take for a look back at those troubled times for the teen retailer, which made one longtime Fool and Abercrombie shareholder uneasy about the company.) Talk about an awkward phase! Abercrombie had suffered a two-year straight stretch of negative same-store sales. It lowered its earnings outlook for several quarters running; although it was able to increase earnings at times, it was squeezing operational efficiencies out of thin sales.

Retreat even further, to 2000, and you might start to wonder whether Abercrombie's a regular rider of the popularity rollercoaster. Longtime Fool Rick Munarriz noted its major fashion misses even then.

One of the toughest things about a retailer in the doldrums -- like recent example Gap (NYSE:GPS) -- is trying to figure out when, if ever, it will regain its fashion sense. Though it took guts for Seth to have faith in this company back in 2004 -- as well as a prescient tip from his schoolteacher wife, who has the inside track on what the cool kids are wearing -- its prolonged downer phase has since given Abercrombie some very easy comparisons to beat.

It's fine for investors to capitalize on the recent gains from Abercrombie's dramatic turnaround. But keep a few caveats in mind. Abercrombie's already lost its style a few times; what's to stop that from happening again? What happens when fickle teens turn their attention to the next trendy new shop? (In 2003, it was Hot Topic (NASDAQ:HOTT), among others.) Last but not least, no one should forget about Abercrombie's (cue ominous, rumbling thunder) offense factor.

That's just wrong
When Abercrombie distributes items that some of us might find offensive, in some ways it's just tapping into the adolescence impulse to rebel. Unfortunately, it doesn't seem to know where to draw the line. One of its most recent gaffes: selling women's T-shirts that read, "Who needs brains when you have these?" (The resulting uproar suggests that I wasn't the only one offended.)

Historically speaking, that's par for the course for Abercrombie. Several years ago, the company got a lot of bad press for its "magalogs," which became notorious for their glossy shots of half-clad (or unclad) adolescents in suggestive poses, and their scandalous editorial content, such as interviews with porn stars. Outrage finally won out when the company released a cleaned-up version.

And while we're reminiscing about A&F's parade of offenses, who can forget the retailer's thongs for little girls, emblazoned with the words "Eye Candy," in its children's "abercrombie" stores? Yuck.

It always struck me as odd that a company that sold such preppy attire, aimed at kids who want to fit in and look like everyone else, would veer off into such outrageous territory. But the bad-boy antics have obviously gotten Abercrombie a lot of attention over the years. Still, companies that go out of their way to shock also run a huge risk of endangering their customer base. When Abercrombie pulls stunts like these, its teen audience may not balk, but the parents holding the credit cards just might.

Marketing messages aren't Abercrombie's only glitch; its management has done some pretty weird things over the years as well.

It's not just the company's apparent indifference to controversy (which may suggest plain cluelessness on management's part). In 2004, Abercrombie shelled out $40 million to settle a class action lawsuit alleging that the company avoided hiring minorities, or forced them to work in back rooms and other areas out of the public eye. The suit also lambasted Abercrombie for its virtually all-white marketing campaigns.

It's a little disturbing when you think about the aspirational, lifestyle brand Abercrombie tries to push, supposedly for the "beautiful people." If the lawsuit's allegations are true, just who does the company expect kids to aspire to be?

I'm different, really
For all its attention-grabbit stunts, I've never quite believed that Abercrombie's merchandise was all that different from what its fickle teen patrons could find at American Eagle Outfitters (NASDAQ:AEOS), Aeropostale (NYSE:ARO), or privately held J. Crew. And as long as we're discussing rivals, what if Gap gets its groove back? If Abercrombie has stumbled before, losing the love of its teen customers, is its next fall from grace only a matter of time?

We can only wait and see, but I'd argue that current Abercrombie investors should keep a keen eye on the company's recent past. Tune in next time for a look at Abercrombie today-- namely, its most recent quarterly numbers and its new Ruehl concept, which might prove to be an important growth driver for the company's future.

Saunter down Abercrombie's memory lane:

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.