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 (hollisterco.com). 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.