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Business

Abercrombie sells the American dream as it expands in Europe

It's the shopping experience that draws crowds to Abercrombie & Fitch's first Hollister store on the European continent. The US fashion retailer is so popular that fans have to queue outside the store in Frankfurt.

Pedestrians walk pass a giant display ad for the retailer, Abercrombie & Fitch

Abercrombie has turned its gaze to Europe

The Abercrombie & Fitch brand Hollister is so well-known in Germany that the company never bothered to promote the launch of its first store on the European continent last year. The store - located in a downtown Frankfurt shopping mall - opened just before Christmas without any advertising, publicity or ribbon-cutting ceremony.

But the young and not-so-young have been pouring into the store ever since, snapping up T-shirts and hoodies emblazoned with the brand name in bold block letters.

At peak hours, queues left and right of the store converge like an open zipper towards the entrance, where two young 'dudes' dressed as Californian surfers are paid to look good and control crowds. Female staff members known as 'Bettys' greet customers in English: "So how are you doing today?"

Queue and crowds at Hollister store in Frankfurt

Customers often have to line up to get inside Hollister's Frankfurt store

Dim lights and dancing "dudes"

The jam-packed store has a distinct disco feel with dim lighting, dark wood interiors, the scent of men's cologne and thumping dance music that drowns out conversation.

"I saw those gorgeous half-naked young men and thought it was a sex shop at first," joked one customer, Kirsten Boschen. "I wondered about those long lines of people waiting outside. You only used to see that in the former East Germany (where consumer goods were scarce), so curiosity got the better of me."

"I waited half an hour to get in. It was a very interesting experience, but I'm 48, so it's not my kind of shop," added Boschen, whose 15 year old daughter Isobel has been to Hollister several times.

Isobel was already aware of the Abercrombie & Fitch and Hollister brands from friends who returned from holidays in the United States wearing the T-shirts.

"Now you don't have to bring the stuff back from the US anymore," Isobel said. "And it's not just the clothes that are cool, but those boys - girls find them hot. I like the music and the perfume they spray smells great."

Retail experts say that it's shopping as a social event that's the main draw.

Pedestrians walk pass a giant display ad for the retailer, Abercrombie & Fitch

A&F enjoys a high level of brand recognition among German teens

"The sensation is not about the merchandise. You can buy T-shirts anywhere else. It's all about the store experience," said Joerg Nowicki, who follows the rag trade for the German weekly magazine Textilwirtschaft.

"You go in, it's loud, it's dark, they have this fragrance. You can smell the store from the outside. It's beautiful people working there. The store experience is unique."

No advertising, no press, nothing

Nowicki said it was remarkable that the Ohio-based fashion chain managed to generate so much buzz without an iota of publicity work.

"Hollister doesn't do anything - no advertising, no speaking with the press, nothing," he said.

"Fans meet up in different Internet forums. They're speculating: 'Do you know where the next store is going too open?' 'How can I get a job there?' They're crazy about it," Nowicki added.

Tom Goulet, head of Abercrombie & Fitch's international operations in London declined any interviews with Deutsche Welle, but he did confirm Hollister's first foray into Spain in the autumn, with stores opening in Barcelona and Madrid. Additional stores are also slated to open in the northern German cities Hamburg and Oberhausen later this year.

Expansion plans

Novelist Ernest Hemingway

Ernest Hemingway wore Abercrombie sportswear

This lack of publicity work strikes retail analysts as odd, especially since Abercrombie & Fitch (A&F) is publicly listed. "Their Frankfurt strategy - an opening by stealth, is very interesting", said Greg Hodge, research director at PlanetRetail in London.

A&F opened its first flagship store outside of North America on London's posh Savile Row in 2007. Since then the company has also opened several Hollister stores elsewhere in the UK as well as flagship stores in Milan and Tokyo.

Although the stores and merchandise for both labels are very similar, Hollister is targeted towards a slightly younger crowd with its California surfer image, whereas Abercrombie & Fitch is closer to its patrician East coast roots.

Founded in 1892, Abercrombie & Fitch once outfitted 20th century legends such as Clark Gable and Ernest Hemingway, but went bankrupt by the mid-1970s. Ohio fashion mogul Leslie Wexner integrated the brand into his Limited group in 1988 and hired present CEO Mike Jeffries to revive its moribund preppie image to one that sizzled with sex appeal. Abercrombie's signature black and white images of sultry, semi-nude models have become so ubiquitous that German teenagers who've never been to the US are familiar with them.

An Abercrombie & Fitch shopping bag

A&F doesn't sell as well as it used to in the US

Not so "cool" in the US anymore

"They're extremely successful in the UK and overseas, but it's not so cool anymore in the US, except for stores where there are lots of foreign tourists," said PlanetRetail's Hodge, who said that A&F's swift expansion in Europe is vital now given the brand's slumping domestic demand.

Annual turnover across A&F's 1,100 stores worldwide was nearly 2.2 billion euros (US$3 billion) in the fiscal year ending January 2010, down 16 percent from 2009 as American consumers headed to lower-priced competitors. Net profit for the same period sagged to near break-even at roughly 200,000 euros, down from 214 million euros the year before.

Sustaining growth and profits in Germany will be no mean feat, said Hodge. Plenty of big-name foreign retail chains have come and gone, such as the Gap, Wal-mart and Marks & Spencer.

"Abercrombie relies on Hollister to drive growth, but needs to tip-toe on how to expand," said Hodge. "They're not so exclusive in the US anymore, and need to be careful not to reach a saturation point overseas".

Textilwirtschaft magazine's Nowicki said the company's long-term prospects could be different from the others. "Hollister has a very special store experience to offer customers," he said, although he did concede that interest from German fans may decline now that they no longer need to fly across the Atlantic to obtain the branded T-shirts.

Author: Diana Fong
Editor: Sam Edmonds

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