The Columbus Dispatch

Kroger, A&F on Amazon’s wish list?

- By Tim Feran

For Amazon, the next big question is, who’s next?

Abercrombi­e & Fitch and Kroger — two Ohio companies — are among seven that a Wall Street analyst believes might be takeover targets by the online retail juggernaut.

New Albany-based Abercrombi­e is of interest to Amazon radar for a variety of reasons, said Citigroup analyst Paul Lejuez. They include: Abercrombi­e’s low value of $620 million by one measure despite sales of $3.4 billion, its large campus in central Ohio, its global infrastruc­ture and young customer base and the option to sell proprietar­y products through flagship Abercrombi­e & Fitch stores.

Cincinnati-based Kroger could appeal to Amazon, Lejuez thinks, because of its sizeable presence in the grocery market, the access to valuable consumer data via Kroger’s analytics division, its ability to take on Walmart and its significan­t online ordering presence.

Other retailers that Lejuez identified as potential targets for Amazon include Sprouts Farmers Market, Bed Bath & Beyond, RH (formerly known as Restoratio­n Hardware), Advance Auto Parts and Kohl’s.

Abercrombi­e officials had no comment on the Citigroup report. Kroger did not respond to requests for comment by deadline.

While Amazon recently acquired Whole Foods Market Inc., the idea of the online retailer buying Kroger seemed unlikely to independen­t grocery analyst David J. Livingston.

“It’s hard to get your head around, but anything is possible,” he said. “A lot of people think Kroger will be more of the acquirer in the next big grocery consolidat­ion rather than being acquired.

“Kroger does stand to benefit nicely in the next few years as there are likely more closings than openings, particular­ly in the Southeast,” Livingston said. “Kroger is in a position where they can survive and benefit from those closures.”

Both Abercrombi­e and Kroger were said to be up for sale this year.

In May, Abercrombi­e

confirmed that it was in preliminar­y discussion­s with several companies regarding a sale, including Abercrombi­e rival American Eagle Outfitters and Columbus-based fashion retailer Express. But two months later, Abercrombi­e announced that it had decided not to sell its stores after all and would instead put its faith in turnaround efforts.

Those efforts

apparently have begun to pay off: Last week, Abercrombi­e’s shares soared by more than 20 percent after the retailer reported a 4 percent increase in comparable­store sales, far better than the 0.3 percent increase predicted by analysts. The gain was led by an 8 percent increase at the company’s Hollister chain, which had “a particular­ly strong quarter,” said CEO Fran Horowitz.

“Hollister is a standout in the industry right now,” Horowitz said. “They’re firing on all cylinders.”

Rumors early this year involved Kroger bidding for Whole Foods, and later, Kroger becoming an acquisitio­n target for Ahold Delhaize, a Dutch conglomera­te which also owns Food Lion and Stop and Shop.

 ??  ??

Newspapers in English

Newspapers from United States