Abercrombie & Fitch to close more stores

The retailer will shutter at least 180 locations through 2015 and turn its focus to online growth and international expansion.

By Kim Peterson Mar 7, 2012 3:39PM
Image: Teens with MP3 player (© RubberBall/SuperStock)Abercrombie & Fitch (ANF) has been closing U.S. stores for a while now, with 135 shuttered in the past two years. That's not going to stop anytime soon.

The retailer will close at least 180 more underperforming stores through 2015 as their leases expire. It might even buy out the leases in other cases, executive Eric Cerny said Wednesday at an investing conference.

The company's U.S. store count was down to 946 at the end of January. So taking 180 more out of the mix is about a 20% reduction. That's pretty significant.

The retailer's shares have fallen 16% in the past year and traded at $47.82 Wednesday afternoon.

Abercrombie just isn't the hot item it used to be. Teens these days are flocking to Polo from Ralph Lauren (RL) and other brands. But internationally, Abercrombie & Fitch is doing great, so it's naturally putting all of its emphasis on its online business and global expansion.

One analyst explains in the following video why she cut her price target on the stock.

Post continues below.
The company has put aside $300 million to invest in new international stores. It will open its third Hollister store in China this weekend. A new flagship store in Hong Kong is coming in the middle of this year, and a Shanghai flagship store is in the works.

The company plans to open 30 to 40 international Hollister stores a year and three to five flagship stores a year.

Closing U.S. stores will help the company, Cerny said. It will get out of the lower-end locations where volumes are low and there are too many promotional markdowns. As a result, the closures will elevate the overall brand, he added.

Promotions are a way of life in the U.S., CEO Michael Jeffries said in the company's fourth-quarter earnings call. But the company doesn't promote much at all internationally.

So that's the new Abercrombie & Fitch, at least in the U.S. There will be fewer stores and fewer markdowns, which may help the company's cachet. The focus will turn to online sales domestically, while international expansion continues at a rapid pace.

Tags: ANFRL
11Comments
Mar 7, 2012 5:44PM
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Want more sales then improve the stores customer service, improve the clothing quality and lose your attitude.  You’re a clothing store and not a collection of noble laureates curing cancer.

 

Personally I hope they fail.    That is all

 

Mar 7, 2012 5:53PM
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Seriously - Obama is behind this dkg62?  Why do some of you fools have to turn every freaking thing political?  Miserable idiot.



Mar 7, 2012 7:19PM
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If the music wasn't so loud and the smell of the fragrance wasn't so strong then maybe more people could stay in the store long enough to buy something.
Mar 7, 2012 7:46PM
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What a shock, no one is buying cheap very over priced clothes that only fit anorexics.....
Mar 7, 2012 7:19PM
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The music is so loud in that store, I guess they couldn't hear the proverbial shoe hit the floor! Glad to see this pretentious store go,bu-bye!
Mar 7, 2012 8:47PM
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I have not shopped there for so long, I almost forgot about the place!  I never felt comfortable at the store.  The staff always acted like they were models and that I should have paid an extra fee just to shop there!  Yeah, what's with the music being so LOUD!!  Should I come with a drink and smoke and dance til they lock the doors.   Never friendly there!!  Sorry, I can only afford a pair of boxers. 50.00?  I think someone mentioned the STRONG fragrance smell, when I would leave the store I would have no more sinus passages left, they were burned out!  Good Luck Too expensive, stinky, rude, super skinny muscle size wearin store! 
Mar 7, 2012 6:55PM
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Many stores have been closing years before Obama took office, so people really need to stop playing the blame game.  This economy has been tore up for some time now, everything that is going on is being exposed due to the fact that certain people pockets are being tapped and now their crying it's Obama's fault. In all honesty this mess belongs to the Bush family. As for these expensive stores who cares the price of clothes in A & F are high. A hoodie on sale is fifty dollars, might as well make our own clothes for less.
Mar 7, 2012 7:38PM
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If they would design and manufacture clothes for human beings people would buy their clothes.  Any guy with muscles cannot wear anything from Hollister. 

 

And with the American population getting fatter and fatter that means less and less kids can fit into their beanpole no figure clothes.   

Mar 7, 2012 7:26PM
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Closing More store lowers the overhead which will make more money .stock are low because the demand for A&F is Not  high . And Suburban kids are not wearing A&F anymore they have moved on.
Mar 8, 2012 3:44PM
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My problem with the brand is that no one who is black or asian has a chance of working there, no matter how buff and beautiful they are.  It is one of the most racist companies in America.  The clothing line has stayed the same for the past 15 years with no change at all.  Newsflash: not everyone is still wearing cargo shorts.  Give them a couple more years and everyone will have moved on.
Mar 7, 2012 5:46PM
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Just another example of the Obama recovery fantasy created for his reelection.
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