Brands Going Brandless

Abercrombie & Fitch to stop using logos.
4:13 | 08/28/14

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Transcript for Brands Going Brandless
I'm Michelle Franzen in New York -- the financial markets close on Wall Street for Thursday August 28 that the story stock. And one stock with the story today Abercrombie & Fitch. Investors dressing down the teen clothing retailer after it missed its earnings and now the company says it wants to get rid of its logos. -- -- why I'm joined by Rick Newman from Yahoo! finance -- written before we get to the logos just how badly did Abercrombie & Fitch do. -- ended terribly their income actually improve by 13%. But white investors and shareholders are worried about his sales are going down their same store sales were down 7% -- overall sales down 6%. And this is a company that just seems to be losing its grip. Line the interest of teenagers I mean this was a hot brand not so long ago. And it's not so hot anymore and you know once you sort of lose the cool factor it's very hard to get it back. And that only adds to the problems a lot of retailers have these days you know competing with online sales and everything else we talk about in -- show. A lot of the time so that led to a sell off today and Abercrombie. Yet -- big business that they're going after a big market the solution proposed by the CEO is to drop logos from its closing. What do you think they said we are confident that the evolution of our assortment will drive further improvements going forward. In particular as we move past the head wind of adverse likes in our local business as -- work. I challenge anybody explain what that means in plain English -- clearing there's that element in our assortment I hope I I'm proud of you. I had not heard of adverse likes before I think the rest of us refer to that a -- like this thing. I guess so. They are gambling that -- taking the logo off the clothing. They will all sell more of it this is contrary to everything we know about branding. Popularity. The way -- buy clothes I was not aware of the teenagers were now interstate in on branded clothing. But maybe Abercrombie. Has a secret weapon up its -- so give us an idea about that today's stock chart walk us through that. Well that's what you see there's about a five point decline. Today after their earnings news came out. Abercrombie. -- before the recession 20062007. Those -- the glory days for Abercrombie stock it. Actually peaked over eighty dollars. It's now down around 41 dollars so it's way off its peak. It has shown signs of a comeback but -- -- -- hasn't gotten anywhere near where used to be. So this is it -- as yet another retailer specialty retailer that faces long term challenges. So if this is this just a hiccup that we're seeing here and them trying to do -- with the logos and why not have both types of clothing Brandon. And I Brandon. Well I think it's pretty it's worth pointing out the company is still profitable. Its profit margin is pretty good in fact. -- the call question with any company like this is where's the growth going to come from. And that's a big concern for retailers mean we've seen a lot of retailers that are basically over extended -- aren't too many physical stores they're committed to real estate to leases. Cost money just to get out of that as if you decide to. If you if you decide you have to shrink and then how do you how do you reach people on line when they have so many other choices it it just doesn't. Feel like Abercrombie has the control one has yet they've done that it really doesn't seem to control its own destiny and could it be that this company is trying to go after a different market. -- -- little hard to see how they do that I mean they have staked their claim on the so called -- kids. Mean this is that this is the CEO Mike Jeffries who famously said they don't want fat people. Wearing their clothes or even shopping in their stores because they don't consider that their clientele they want to appeal to all American cool kids. And the all American cool kids seem to be saying we're not that interest -- you mean this you know they've made it a popularity contest and they seem to be losing. Well Rick Newman from Yahoo! finance thank you for joining us sure -- you've been watching stories -- stay with For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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