International Marketing Management class. Masters Degree at EAESP-FGV Brazil

1. Abercrombie &
Fitch
Group members: Astrid Babot, Flavia Hennessey, Jan Volny,
Jurriaan Daams, Luis Felipe Banlaky, Wei Chieh Lee
Prof. Luís Henrique Pereira
International Marketing Management 2013
1

2. Agenda
Brief Information of A&F
Market Potential in Brazil
Marketing Plan
Financial Projection
Conclusion

3. Basic information
• Name: Abercrombie & Fitch
• Foundation : June 4, 1892
• Founders : D. T. Abercrombie, E.
Fitch
• President and CEO: Mike Jeffries
• NYSE from 1996
• Headquarters : New Albany,
OH , United States
3

4. A&F’s markets
• In total: 1049 stores
• US market:
o shrinking
• International markets:
o growing
o Europe
o Asia
o Canada
4

5. A&F’s Goals
• Domestic: consolidation and shift towards ecommerce
• International: internationalization and rapid
expansion of stores (main marketing tool!)
• Brazil:
• Strategic: strong expansion of stores, introduce
multiple brands
• E-commerce gains importance
• Social: diversity policy and cooperation with cotton
industry

6. Brazilian Fashion Market
5th largest apparel
market in the world
Young people drive
the industry – 60% of
Brazil’s population is
below 29
79% of Brazilians
look forward to
shopping for
clothes and spend
USD$402 annually
on apparel
6

7. Buyers of A&F in Brazil
7

8. Consumption Characters
• Brazilians love to buy, shopping and show off
• Department stores(37%), Multi brands store(29%)
and Single brand store(27%).
• Social Class A & B consume 57% of apparel in Brazil
• 68% bought apparels in special dates
• Prefer to pay by credit cards
8

9. Competition

10. Competition
Value proposition
Price

11. Market Penetration
strategy

12. Globalization.vs.Localization
• Global Strategy: same product, hot store
employees, perfume, electronic dance music,
lighting… SAME CONSUMER EXPERIENCE!

13. Promotion
• Target 14-25 years old middle and high class
people from SP and RIO
• Focus on infiltrating three media channels to reach
our target consumer (print media, broadcast media
and web/social media).

14. Print media

15. Broadcast media

16. Web/Social media

17. Flagship store opening
• http://www.youtube.com/watch?v=y_8ToiummuU

18. Distribution
• 2 street stores: one in Sao Paulo (Oscar Freire) and
one in Rio de Janeiro (Visconde de
Pirajá).
• Online shopping and App store

19. Pricing
• Keep as Premium
• Compared to John John Denim and OSKLEN
Shirt
Tees
Sweatshirt
Jeans
Cologne
R$270,00
to
R$450,00
R$140,00
to
R$180,00
R$300,00
to
R$450,00
R$400,00
to
R$750,00
R$250,00
to
R$450,00
($80)
($30)
($80)
($80)
($50)
19
Average USA price

20. REVENUE
Statement
Stores
Yr 1
(all numbers in $000)
Yr 2
Yr 3
2
18.000
3.240
21.240
637,2
20.603
3
27.000
4.860
31.860
955,8
30.904
4
36.000
6.480
42.480
1274,4
41.206
Cost of goods sold
7.859
11.788
15.718
Gross Profit (Loss)
12.744
19.116
25.488
Stores and distribution Expense
Marketing, General and Administrative Expense
9.346
67
14.018
100
18.691
134
Net Income Before Taxes
Taxes on income
3.331
1.133
4.997
1.699
6.663
2.265
2.199
3.298
4.398
Store Sales
Online Sales
Gross sales
Less sales returns and allowances
Net Sales
NET INCOME (LOSS)
20

21. Calendar
Month 1
ACTION
Duration
(weeks)
Month 2
Month 3
Month 4
Month 5
Month 6
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Legal
Constitution *
Brand Registration
6
1
Products
Defining Mix
Importation
4
6
Local
Search
Negociation
Project
Construction
Positioning everything
4
2
6
8
2
Staff
Search
Selection
Hiring
Training
4
2
1
3
22 weeks
21

22. Conclusion
• Follow the Global Strategy
• 2 Flagship stores (RJ and SP) – way to test the
market
• Brazil is the right place – A and B classes are
growing up
22

23. Thanks !

24. Appendix
REVENUE
Stores
Gross sales
Less sales returns and allowances
Online Sales
Net Sales
Assumptions
Yr 1
Yr 2
Yr 3
2
$21.240
3
$31.860
4
$42.480
$18.000
$3.240
$21.240
$27.000
$4.860
$31.860
$36.000
$6.480
$42.480
per year
9000
per store
18% of store sales
37%
of goods
sold
Cost of goods sold
$7.859
$11.788
$15.718
Gross Profit (Loss)
$13.381
$20.072
$26.762
Stores and distribution Expense
Marketing, General and Administrative Expense
Other Operating Expense (Income) Net
$9.346
$2.232
($91)
$14.018
$3.348
($137)
$18.691 44% of gross sales
$4.465 10,5% of gross sales
($183) -43% of gross sales
Net Income Before Taxes
$1.895
$2.842
Taxes on income
NET INCOME (LOSS)
$3.789
$644
$966
$1.288
$1.250
$1.876
$2.501
34%
Of Net
Income
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