Michael C. Newhouse

Quote of the week

"The learning is that we are in very tough economic times, where price has become more of an objective to us than it ever has been, and we are using this strategy to drive traffic during this time," Ambercrombie Chief executive Mike Jeffries said during a recent conference call with analyst.

Okay, we are a year into the worst recession ever recorded in history and now he is admitting that the company is learning! Could this be one of the reasons that sales for the retailer have plummeted down 30% and they posted a net loss of $26.7 million for the second quarter? Analyst also site the fact that A&F has not offered discounts or price cutting along with missing the mark in fashion offerings.

Maybe A&F should listen more to their customers. A 23 year old male at a mall was interviewed says he prefers A&F to other brands but cannot afford them. Female 25 stated she would shop more frequently at A&F if prices were lower. Hello, is anybody listening?

I completely understand protecting a brands current and long term brand value but also understand that if sales are down strategy must be evaluated for effectiveness. Most businesses are in survival and sustain mode creating cost effective operational and marketing activities. Next time you are in your local mall, take a look at the traffic in A&F and if bags are leaving the store.