Tak­ing a tum­ble

Aber­crom­bie & Fitch takes it­self off the block and shares plunge

The Guardian (Charlottetown) - - BUSINESS -

Aber­crom­bie & Fitch is no longer up for sale, a de­vel­op­ment that isn’t sit­ting well with in­vestors hop­ing for white knight to res­cue the strug­gling teen re­tailer.

Shares plunged 21 per cent to an all-time low in mid­day trad­ing Mon­day.

Aber­crom­bie said in May, af­ter clos­ing dozens of un­der­per­form­ing stores, that it was it in talks with sev­eral par­ties about a po­ten­tial deal. The com­pany said Mon­day that it has ended all such ne­go­ti­a­tions.

More peo­ple are shop­ping at lower-cost, fast-fash­ion stores like H&M and For­ever 21, and that has wreaked havoc on one­time mall main­stays like Aber­crom­bie. Aero­postale Inc., Wet Seal and oth­ers have al­ready sought bankruptcy pro­tec­tion. Sears last week, af­ter years of clos­ing stores and re­trench­ing, said it would close an­other 35 un­prof­itable Sears and Kmart lo­ca­tions. It said ear­lier this year that in was un­clear if it had enough cash to stay in busi­ness through the end of the year.

Hud­son’s Bay Co., which owns Saks Fifth Av­enue, Lord and Tay­lor, said last month that it was cut­ting thou­sands of jobs in North Amer­ica as sales slump.

Aber­crom­bie & Fitch Co., based in New Al­bany, Ohio, said that sales re­main strong at its surf-in­spired Hol­lis­ter brand and is con­tin­u­ing to work on im­prov­ing the per­for­mance at Aber­crom­bie. In the first quar­ter, sales at es­tab­lished Hol­lis­ter stores rose 3 per cent, but they slumped 10 per cent at Aber­crom­bie.

The chain has tried to tweak its brand by dump­ing the sug­ges­tive ads that once de­fined it, and it has up­dated its look. That has yet to turn its for­tunes around.

First-quar­ter losses were wider and rev­enue slid.

Shares fell $2.53 to $9.64 Mon­day. Com­pany shares fetched al­most 10 times that amount at their height in 2007, just be­fore the re­ces­sion al­tered the re­tail land­scape.

In an­other re­minder of the vast chal­lenges that all re­tail­ers face, Ama­zon.com kicks off its an­nual “Prime Day” event at 9 p.m. Eastern on Mon­day.

Ac­cord­ing to the lat­est data from Con­sumer In­tel­li­gence Re­search Part­ners, 85 mil­lion Amer­i­cans are now paid mem­bers of Ama­zon Prime, up 38 per cent from this time last year. Those mem­bers, ac­cord­ing to CIRP, spend $1,300 on av­er­age each year, al­most twice that of non-mem­bers.

BEBETO MATTHEWS/AP PHOTO

In this Mon­day, May 22, 2017, file photo, a store win­dow re­flects a street scene at an Aber­crom­bie & Fitch store on New York’s Fifth Av­enue. On Mon­day, the teen re­tailer an­nounced it is no longer look­ing to sell.

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