Abercrombie & Fitch Profits Fall on Plunging Sales
Posted on August 14, 2009Abercrombie & Fitch reported a Q2 loss of $26.7 million. Sales plunged for the once ultra-hip teen retailer. Quarterly sales were down 23% overall and sales are stores open at least a year were down 30%. Markewatch.com reports that the company is pushing plaid for back-to-school.
The company has added dresses and jumpsuits, and has prominently featured plaid shirts (a popular style this season) to lure back-to-school demand as retailers vie for sales in the industry's second-biggest selling period.Maybe the plaid trend will help the struggling retailer. We haven't noticed the large posters of shirtless young men inside the stores these days. Now the first thing we see when we glance inside a noisy Abercrombie & Fitch store are notices about sales.
Jeffries said he also is targeting growth internationally and said the company is on track to open flagship shops in Milan and Tokyo, as well as 10 mall-based locations in Canada, Germany, Italy and the United Kingdom under labels including Hollister.
"Consumer-spending patterns domestically continue to be dictated by cost and value propositions, and this is clearly a headwind for our premium brands," the chief executive said on a conference call with analysts. "Our future is tied to the international expansion of our brands. We increasingly see this opportunity, which will drive the future growth and profitability of our business, pointing in a positive direction."