Abercrombie to Vacate 100 Underperforming Stores
Specialty youth apparel retailer Abercrombie & Fitch has identified
more than 200 underperforming stores. According to the Wall Street Journal, about half of those stores will have a lease expire in the next three years, at which point Abercrombie will vacate them.
Most of the stores scheduled for closure operate under the premium Abercrombie & Fitch banner, rather than its Hollister and Gilly Hicks banners. Abercrombie executives are quoted in the Wall Street Journal as saying the retailer intends to reduce store footprint, refocus the brand and improve its premium image through the closures.
Abercrombie Sales Sag
Abercrombie is planning to close stores in the wake of same-store sales declines during 2009 and average unit prices which were down 14% in February 2010. The retailer intends to continue an ongoing aggressive discounting program through the spring in hopes of boosting sales, so average unit price declines will likely continue. Abercrombie intends to produce positive same-store sales results for the full year 2010.
In addition to declining same-store sales, Abercrombie produced other
disappointing financial results during its recently completed fiscal year 2009. Most significantly, these include a net income drop from $272.3 million to $300,000, or more than 99%.
Abercrombie Plans International New Stores
Internationally, Abercrombie is planning to expand its store footprint even as it contracts in the U.S. During 2010, Abercrombie plans to open Abercrombie & Fitch flagship stores in Copenhagen, Denmark and Fukuoka, Japan. In addition, the company expects to open approximately 30 international mall-based Hollister stores. Abercrombie also plans to open a Hollister Epic store on Fifth Avenue in New York.
At the end of fiscal 2009, Abercrombie operated a total of 1,096 stores, including 340 Abercrombie & Fitch stores, 205 abercrombie kids stores, 507 Hollister Co. stores and 16 Gilly Hicks stores domestically. The company also operated six Abercrombie & Fitch stores, four abercrombie kids stores and 18 Hollister Co. stores internationally.
