Lots of companies promise to put ‘customers at the center.’ Abercrombie & Fitch Co. turned the buzzword into real results

Corporate turnarounds in retail can often yield good results initially as a CEO grabs low-hanging fruit like closing weak stores or hiring new design teams. But they also tend to fizzle unless the CEO does the deep, years-long work to set up the company for long-term success.

That’s exactly how Abercrombie & Fitch Co under CEO Fran Horowitz is still reporting industry-leading sales growth years into her tenure. When I profiled her in Fortune in 2022, I explored the changes she made to turn around a company seeing precipitous sales declines as shoppers left in droves.

She dropped her predecessor’s autocratic command-and-control way of managing the company in favor of letting the rank and file have more input. She raised the quality of the clothing, reduced the stylistic overlap between the namesake brand and Hollister which had become almost indistinguishable, and, crucially, decided to eschew chasing trends. As she told Emma at the MPW Summit, she never wanted A&F Co. to be “cool.”

That yielded enormous improvements in the first five years of her tenure. But those have continued since, amazing in the world of apparel where shoppers are fickle, with the company set to pass $5 billion in sales for the first time this year. In the first half of this fiscal year, sales are up 7%. How did she do it?

“The reason for our sustained success is that we re-built the entire company from bottom to top,” Horowitz told me earlier this month. “We inspected every single function and we really created a very different model.”

Her proudest achievement has been changing a culture. “People at any level have the opportunity to interface with senior management. We have a very democratic culture where people can speak freely,” she says. Horowitz and her leadership team have also made it easier for promising staff to stretch themselves within the company.

And with all that buy-in from staff, Abercrombie & Fitch has been able to expand its business with efforts such as a bigger bridal offering, a new NFL fashion partnership and starting to sell Abercrombie Kids at Macy’s. The company is more adventurous now, she says. “There’s no shame in failing. Let’s know quickly. Let’s own it,” she says.

That also means actually putting “customers at the center of everything we do,” something every company says it does but that too few actually pull off.

The company regularly sends teams of people to a market to spend a whole weekend with customers, hanging out with them, going shopping together, and really getting to know them. That complements the mounds of data Abercrombie & Fitch Co. gets via other means. “People say, that’s so copyable,” Horowitz says. “It’s only copyable if you actually do it right and create a team that understands how important it is.” And Wall Street expects the company to report results on Tuesday that show Horowitz’s methods are working.

Phil Wahba
phil.wahba@fortune.com

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