Abercrombie & Fitch has been called America's most-hated retailer - but there's one bright spot in the business

Abercrombie & Fitch reported its first positive quarter since 2012 on Wednesday.

Abercrombie's real success story is Hollister, which is quietly pulling the weight of the parent company right now.

Hollister reported a 4% increase in comparable sales for the fourth quarter, compared with a slight decline for Abercrombie's namesake brand. 

Hollister is Abercrombie & Fitch's younger surfer sister, which, while maybe not as sophisticated as the looks one might find at Zara, has a reason for holding strong in an otherwise troubled time for malls and the apparel sector: it hasn't abandoned its target audience.

 "Hollister is benefiting from a consistency of positioning in ... both in terms of target customer, lifestyle [and] life stage," Abercrombie & Fitch Chairman Arthur Martinez said to Business Insider, adding that the "product is designed for that customer in that place."The company's Instagram page shows a clear point-of-view: that of a laid-back, California surfer, and its bio claims that the retailer "is the fantasy of Southern California." That's particularly evident - all road trips and beach time, no worries or cares. Further, Hollister isn't trying to be something it's not.

Knowing your target customer is crucial to keep them shopping there, whether or not they're 'fashionable.' Stores targeting older, more conservative shoppers, like J. Crew and Banana Republic, have made the grave mistake of trying to cater to more fashion-forward audiences and have seen sales dip as a result.

Up until recently, Abercrombie & Fitch had been struggling to keep up with trends in a fast-fashion, athleisure-driven world. The brand appears to now be settling on a revised sartorial vision - one that's classic, semi-bohemian, and still a bit preppy. But the company's logo and signature moose mild still serve as a cold reminder of the brand's history.

Further, Hollister has a second advantage: it doesn't have the burden of carrying Abercrombie & Fitch's history; wearing a Hollister remark doesn't conjure up a reminder of Mike Jeffries telling Salon that the apparel is intended for the "cool kids."

"The Abercrombie brand itself carries with it, if you will some of the ... baggage that has befallen the entire company," Martinez said. "The brand as we go to market and the name of the corporation is the same and any shortfalling of the corporation's performance [and] attitude ... translates to the brand."

So simply by not being Abercrombie, Hollister is benefiting. 

 

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