Abercrombie & Fitch may be the only retailer in U.S. history that, after losing its shirt, is making its sales staff put them on. Once a formidable presence in young-adult retail, A&F is dropping its hallmark bare physique. Models and sales associates will wear shirts. The company is replacing its highly sexualized brand for something new. What that will be has yet to be determined. From a brand perspective, A&F has lost its identity, again, and the cost of losing your brand identity can cost millions.

As Jessica Contrera wrote in her April 27th article in the Washington Post, the Abercrombie & Fitch brand was founded in 1892 and became the ultimate, premiere store for outdoorsmen. Teddy Roosevelt and Ernest Hemingway were among its customers. A&F hit its zenith in the 1920s but eventually went bankrupt in 1977. Not a bad run, but it could have continued to flourish if it had understood that a strong brand’s power lies in its ability to change with the times.

When a brand loses its identity, it can cost shareholders hundreds of millions of dollars. You can avoid that cost by sharpening your focus on your brand’s core identity versus a relentless focus on your extended brand identity. The core identity is just that — the core. It’s the foundation of your brand. It’s based on the stripped-down, simple values that your brand espouses.  Abercrombie & Fitch for example, might have focused on core values such as personal freedom, nature, and rustic simplicity.

An extended identity expresses your brand’s core values in a way that speaks to customers at a particular period of time. In 1997, when A&F launched its publication A&F Quarterly, its extended brand espoused the athletic, sexual, and simple beauty of the human form. Understanding your brand’s core identity and its extended brand identity is essential in terms of product, organization, person & symbol.

While I know none of the inner decision-makers of the A&F brand development and marketing campaigns, I do know that confusing your extended brand with your core brand usually ends badly.

As Abercrombie & Fitch reemerged in the late 1990’s, it loosely maintained its outdoor heritage with emblems of a moose on rugged-looking casual wear. But its brand focused tightly on young adults with perfect bodies.

In 2005, I was fascinated by the bold, sexual appeal of Abercrombie & Fitch. Although I was well past its demographic target, the store struck a chord in me. It emulated the ideal, healthy, sexual appeal of a young American. And it was mesmerizing. However, once past the initial appeal, the store offered over-priced clothing for a small population – those in perfect physical condition with disposable income. Needless to say, it wasn’t the store for me.

The branding campaign was extremely well executed and demonstrated the highest quality of work among communication professionals. And, they should be applauded. But, its extended brand identity – appealing to the ultra-good-looking young consumers – appeared to become, its core brand identity. And that was the problem. If the economy hadn’t changed, and the target audience didn’t become the generation with the worse job prospects in recent American history, it may have continued to thrive. But, as the target audience for the decade-long campaign disappeared, so did the brand’s value.

There lies the difference between a strong core identity and strong extended identity. A brand with a strong core identity survives. It doesn’t lose its value to customers, but adapts its extended identity. The extended identity best communicates that value, at that point in time, to its audiences. A brand with a strong core identity can evolve with its customers and attract new customers, should its existing base grow up.

With perfect hindsight, I can suggest that if the original Abercrombie & Fitch identified itself as more than the ultimate sporting-goods store, but chose as its core brand the ultimate experience of nature and personal freedom associated with it, the company would have adapted fabulously to the commune-loving youth of the late 1960’s, the health and fitness revolution of the 1970’s, the experience-seeking cult of the 1980’s and all of the generations of young people that followed — from the highly-educated urban baristas of 2010, to the savvy, social media experts of today.

If everyone in your organization clearly understands the distinction between your brand’s core identity and its extended identity, you will help generate millions of dollars in revenue for your shareholders over time. And, when a brand delivers a high level of shareholder value, it helps brand managers, marketing managers, and CEOs keep their jobs.

Michael J. Keating, president