1.Abercrombie & Fitch Group members: Astrid Babot, Flavia Hennessey, Jan Volny, Jurriaan Daams, Luis Felipe Banlaky, Wei Chieh Lee Prof. Lus Henrique Pereira International Marketing Management 2013 1

2. Agenda Brief Information of A&F Market Potential in Brazil Marketing Plan Financial Projection Conclusion 3. Basic information Name: Abercrombie & Fitch Foundation : June 4, 1892 Founders : D. T. Abercrombie, E. Fitch President and CEO: Mike Jeffries NYSE from 1996 Headquarters : New Albany, OH , United States3 4. A&Fs markets In total: 1049 stores US market: o shrinking International markets: o growing o Europe o Asia o Canada4 5. A&Fs Goals Domestic: consolidation and shift towards ecommerce International: internationalization and rapid expansion of stores (main marketing tool!) Brazil: Strategic: strong expansion of stores, introduce multiple brands E-commerce gains importance Social: diversity policy and cooperation with cotton industry 6. Brazilian Fashion Market 5th largest apparel market in the worldYoung people drive the industry 60% of Brazils population is below 2979% of Brazilians look forward to shopping for clothes and spend USD$402 annually on apparel 6 7. Buyers of A&F in Brazil7 8. Consumption Characters Brazilians love to buy, shopping and show off Department stores(37%), Multi brands store(29%) and Single brand store(27%). Social Class A & B consume 57% of apparel in Brazil 68% bought apparels in special dates Prefer to pay by credit cards8 9. Competition 10. Competition Value propositionPrice 11. Market Penetration strategy 12. Globalization.vs.Localization Global Strategy: same product, hot store employees, perfume, electronic dance music, lighting SAME CONSUMER EXPERIENCE! 13. Promotion Target 14-25 years old middle and high class people from SP and RIO Focus on infiltrating three media channels to reach our target consumer (print media, broadcast media and web/social media). 14. Print media 15. Broadcast media 16. Web/Social media 17. Flagship store opening http://www.youtube.com/watch?v=y_8ToiummuU 18. Distribution 2 street stores: one in Sao Paulo (Oscar Freire) and one in Rio de Janeiro (Visconde de Piraj). Online shopping and App store 19. Pricing Keep as Premium Compared to John John Denim and OSKLEN ShirtTeesSweatshirtJeansCologneR$270,00 to R$450,00R$140,00 to R$180,00R$300,00 to R$450,00R$400,00 to R$750,00R$250,00 to R$450,00($80)($30)($80)($80)($50) 19Average USA price 20. REVENUEStatementStoresYr 1(all numbers in $000)Yr 2Yr 32 18.000 3.240 21.240 637,2 20.6033 27.000 4.860 31.860 955,8 30.9044 36.000 6.480 42.480 1274,4 41.206Cost of goods sold7.85911.78815.718Gross Profit (Loss)12.74419.11625.488Stores and distribution Expense Marketing, General and Administrative Expense9.346 6714.018 10018.691 134Net Income Before Taxes Taxes on income3.331 1.1334.997 1.6996.663 2.2652.1993.2984.398Store Sales Online SalesGross sales Less sales returns and allowances Net SalesNET INCOME (LOSS)20 21. Calendar Month 1ACTIONDuration (weeks)Month 2Month 3Month 4Month 5Month 61 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24Legal Constitution * Brand Registration6 1Products Defining Mix Importation4 6Local Search Negociation Project Construction Positioning everything4 2 6 8 2Staff Search Selection Hiring Training4 2 1 322 weeks 21 22. Conclusion Follow the Global Strategy 2 Flagship stores (RJ and SP) way to test the market Brazil is the right place A and B classes are growing up22 23. Thanks ! 24. Appendix REVENUE Stores Gross sales Less sales returns and allowances Online Sales Net SalesAssumptionsYr 1Yr 2Yr 32 $21.2403 $31.8604 $42.480$18.000 $3.240 $21.240$27.000 $4.860 $31.860$36.000 $6.480 $42.480per year 9000 per store 18% of store sales37%of goods soldCost of goods sold$7.859$11.788$15.718Gross Profit (Loss)$13.381$20.072$26.762Stores and distribution Expense Marketing, General and Administrative Expense Other Operating Expense (Income) Net$9.346 $2.232 ($91)$14.018 $3.348 ($137)$18.691 44% of gross sales $4.465 10,5% of gross sales ($183) -43% of gross salesNet Income Before Taxes$1.895$2.842Taxes on income NET INCOME (LOSS)$3.789$644$966$1.288$1.250$1.876$2.50134%Of Net Income 24