Hollister to be transformed into a fast-fashion retailer
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The transformation for the label would indicate changes to the entry price point and larger variety of styles for shoppers, as well as key changes to its supply chain in order to support the fast-fashion business model. This news comes not long after A&F introduced a new store concept for its US Hollister stores, to offer more retail space in store and larger store windows.
Hollister
to change its core brand concept
Similar to other teen-based fashion retailers in the US, the Hollister label has suffered through declining sales during recent years, as teenagers turn their attention to the fast-fashion brands which offer the latest styles for the lowest prices, in comparison to branded or logo apparel retailers.
A&F's same store sales dropped 10 percent in the financial year ending February 1, during which Hollister's sales, excluding new or closed stores dropped 14 percent, with the latter label accounting for half of total company sales.
Hollister is currently looking for a new president with prior experience leading a fast-fashion brand and increasing its home based supply merchants and sourcing options, reported the Wall Street Journal.
The fashion company also plans on dropping the cost of Hollister items and further differentiating the label from parent company A&F. Hollister is presently working with its West Coast vendors to develop a faster and more responsive supply chain according to A&F's newly appointed chairman, Arthur Martinez.
Martinez will be charged with the responsibility of making the necessary changes to the brand and its supply chains to better suit the needs of its consumers. The candidate that the chairman is thought to be looking for to become Hollister's presently would be someone who knows how to "bring new merchandise in far faster than the traditional cycle".
However, activist investor Engaged Capital LLC, which holds a 0.5 percent stake in the company continues its call for the removal of CEO Mike Jeffries, claiming that he is overpaid and stands in the way to a sale.
Engaged Capital Chief Investment Officer Glenn Welling shared his displeasure last week to Martinez support of Jeffries adding that the company "board doesn't have the credibility to make the determination that Hollister should be a fast-fashion retailer or that Mike Jeffries should be leading the turnaround." He argues that Hollister could "differentiate itself without changing what the core brand is".