Abercrombie & Fitch said it would close 40 to 50 stores in the US this year as the youth fashion retailer’s shares tumbled following weak sales in the crucial Christmas quarter.
Like-for-like sales fell 1 per cent at Abercrombie & Fitch’s US stores in the three months to February 2, extending previous declines in an intensely competitive sector where its rivals include American Eagle, Aéropostale and Forever 21.
The Ohio-based retailer, known for its thumping in-store music and scantily clad male door staff, said direct sales to US consumers, which include its ecommerce unit, rose 5 per cent, although they remain a small part of its business.
In an attempt to offset slower US growth, Abercrombie, which operates namesake stores as well as surf-themed Hollister and Abercrombie Kids, has made a big push overseas and online.
But its international segment performed even more poorly than the domestic stores, with like-for-like sales down 14 per cent.
“The earnings report was just one big giant pool of negativity,” said Brian Sozzi, chief equities analyst at NBG Productions. “Sales did not meet expectations, particularly in its international segment, and the company offered cautious comments on its first-quarter outlook. This is just something the market did not want to hear.”
“Also the company is looking to take prices up. The reason why Abercrombie had done better in recent months was because they had become more competitive on prices, so this is a big concern,” he added.