Abercrombie & Fitch 2000 Annual Report Download - page 4

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Abercrombie &Fitch
CHAIRMAN’S LETTER
The year 2000 was clearly a tough one for most retailers. While it was also a tough year for us, it
was successful. It was successful in that we:
•continued to improve our bottom line
•repositioned and recognized great improvements in our women’s business
•successfully tested and announced the roll out of our newest concept, Hollister Co.
•added over 100 new stores
•opened our new distribution center and neared completion of our home office.
Even in a challenging retail environment, I’m pleased we improved our earnings and demon-
strated our strong commitment to protecting and improving our bottom line. Our EPS increased
12% and operating profit was nearly 21% of sales, one of the highest in the industry.
During the year we made major progress in repositioning our women’s business. Our focus
on a sexy, feminine look has connected with the customer and we are now starting to generate
strong women’s comp store increases. We also have huge potential to broaden our merchandise
assortment in women’s. During 2000 we successfully introduced women’s underwear/ lingerie
and gymwear, and we see these new classifications continuing to grow very rapidly. The quick
turnaround of the women’s business demonstrates the strength of our brand. The customer
clearly wants Abercrombie & Fitch and responds positively when we have the right fashion.
Although we had a difficult year in the men’s business it remains one of the most productive
businesses in specialty retail. I’m very optimistic about our men’s potential for back-to-school
and Christmas 2001.
Our newest concept, Hollister continues to surpass expectations. This West Coast oriented
concept for high school age guys and girls has beaten all our sales estimates and I expect huge
growth from this brand in the future. Now remember, this is a totally new brand launched
without any advertising or marketing support.
The brands continue to grow very rapidly. We aggressively opened 104 new stores in 2000:
50 Abercrombie & Fitch stores; 49 abercrombie stores and 5 Hollister stores. Our e-commerce
site attracts over 1 million unique visitors a month and continues to grow at a brisk pace.
A&FTV and MP3 continue to offer fun and interesting content for our target customer. On-line
shopping offers most items you’ll find in the stores and we’re continually enhancing the site so
that it’s easier to use. In 2000 we successfully began to sell kids merchandise over the Internet
and more than tripled our adult e-commerce business.
A&F has never been in a better growth position. We will continue to grow our store base in
2001 and are targeting 50 Abercrombie & Fitch stores and 60 abercrombie stores. Hollister will
begin to roll out in earnest this year with around 20 new stores.
Our new distribution center is up and running and all of us in the home office are extremely
excited about our imminent move to our new headquarters. The layout and design of our new
campus is an extension of our brands. The atmosphere will be very positive and allow us to
attract talented people.
This is an exciting time. I am more enthusiastic about this business than ever, and I’m confi-
dent that we have the right strategies and the right team in place to fortify Abercrombie & Fitch’s
position as the dominant lifestyle brand.
Michael S. Jeffries
Chairman and Chief Executive Officer
Abercrombie &Fitch