Abercrombie & Fitch Reports Tough Quarter

Abercrombie & Fitch Co.’s (New Albany, Ohio) first quarter results reflected net sales decreased 24 percent while comparable store sales dropped 30 percent.
By brand, Abercrombie & Fitch’s same-store sales decreased 26 percent; abercrombie’s dropped 33 percent; Hollister Co.’s down 32 percent; and RUEHL’s declined 34 percent.

“The first quarter was clearly a difficult one for us,” says ceo and chairman Mike Jeffries. “With a challenging economic environment, the consumer continues to show a reluctance to spend on premium brands; a price consciousness dictating shopping habits unlike anything I have ever seen. We believe this is a temporary phenomenon but will approach the current conditions with a conservative mindset until we see a clear improvement.

“This year will be a transitional year for us as we continue to focus our efforts on laying the groundwork for our long-term success and prosperity by protecting our brands, preserving cash and pursuing our international growth opportunities,” he says.

The company recently entered into a new lease for the abercrombie 5th Avenue flagship store in New York, which is expected to open in 2010. It’s also on track to open four flagship stores in fiscal 2009 including Hollister Co. in Soho, Abercrombie & Fitch and abercrombie in Milan, and Abercrombie & Fitch in Tokyo.

Internationally, the company plans to open ten mall-based stores in fiscal 2009, including one abercrombie store in Canada, seven Hollister Co. stores in the United Kingdom, one Hollister Co. store in Germany and one Hollister Co. store in Italy. Domestically, two abercrombie stores, four Hollister Co. stores, two Gilly Hicks stores and two outlet stores are planned.