Turn­around still elu­sive

Daily Freeman (Kingston, NY) - - BUSINESS -

As the hol­i­day shop­ping sea­son be­gins, teen re­tailer Aber­crom­bie & Fitch is wrestling with the blues.

The re­tailer’s shares tum­bled this month af­ter it re­ported a key sales fig­ure for its main brand dropped 14 per­cent, and that over­all prof­its plum­meted 81 per­cent in the third quar­ter. Now the ques­tion is: When will a turn­around come?

A&F, which used to be a hot des­ti­na­tion for teens, has strug­gled to lure young shop­pers who are opt­ing for more af­ford­able op­tions like H&M. Many found the com­pany’s sex­u­al­ized mar­ket­ing – once a big at­trac­tion – too alien­at­ing. Last year, A&F ditched its shirt­less mod­els and is re­work­ing its ad­ver­tis­ing to be more in­clu­sive. It’s been spruc­ing up its mer­chan­dise too. But it still faces chal­lenges get­ting shop­pers to its stores. Shares of Aber­crom­bie are trad­ing at around $15, down 42 per­cent this year. An­a­lysts have an over­all “hold” rat­ing. But 26 per­cent of an­a­lysts now have a “sell” on the stock, says Fac­tSet. “We be­lieve it will take time for the cus­tomer to ac­knowl­edge the changes,” writes RBC’s Brian Tu­nick.

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