Marketing 50


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It's not easy being the middle child, but Hollister Co. has managed to stand out within its parent company, Abercrombie & Fitch, and with teenagers nationwide.

Overshadowed by the more controversial Abercrombie & Fitch chain and by the birth of a new store-its parent company recently announced it will open a chain offering more tailored clothes-Hollister has grown to 197 stores, and retail analysts say that's only a peek at its potential. Comparable-store sales were up 4% during the second quarter vs. a year ago, while the Abercrombie & Fitch brand was down 6%.

"Hollister is the growth vehicle and will have a bigger impact on the company with each passing quarter," Goldman Sachs & Co. retail analyst Margaret Mager wrote in a recent report.

Marketing efforts are decentralized but answer to Michael Jeffries, the 59-year-old CEO of Abercrombie & Fitch.

Abercrombie & Fitch wants to make Hollister an "aspirational" brand for teens. Hollister's main marketing tools are its loyalty program, Club Cali, and its Web site ( Club Cali offers members a variety of perks, including gift cards based on money spent and other entertainment-related prizes. In 2002, Hollister signed Creative Artists Agency to find entertainment tie-ins and in 2003 launched Lounge 22, a platform of events targeted to Club Cali members, mostly after-hours parties with up-and-coming bands held at local Hollister stores.

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