A&F's Shares Tumble as Teens Turn Elsewhere

by Associated Press  on Thursday, Aug. 28, 2014 11:42 am  

NEW ALBANY, Ohio — The Abercrombie & Fitch logo has lost the power it once wielded.

Shares of Abercrombie & Fitch Co. tumbled Thursday after reporting weak sales as more teens shop elsewhere.

The company is trying to stock trendier clothing — and it turns out that means stripping off the once-prizedAbercrombie logo.

The New Albany, Ohio-based retailer reported that revenue fell 5.8 percent to $890.6 million, short of analyst estimates.

Revenue at stores open at least a year dropped a steep 11 percent, including 8 percent at U.S. stores. The company's earnings per share beat estimates.

A&F and other traditional teen stores are facing an uphill battle to turn their businesses around as mall traffic drops and shoppers' tastes change.

A slowly recovering economy is making parents and teens to think twice about splurging on clothes. Expensive standbys like Abercrombie also have lost business to "fast fashion" chains like H&M, known for quickly churning out trendy $9 tops.

Teens are also spending less time at the mall and more time researching and buying on mobile devices. And when they do buy, they're more likely buying the latest gadget than filling their closets.

Last week, Aeropostale last week reported its seventh consecutive quarterly loss on slumping sales. It also forecast another loss in the current quarter.

At the same time, Aeropostale, based in New York, reinstated Julian Geiger, its former CEO.

Earnings at another competitor, American Eagle, have also declined on weak sales.

Mike Jeffries, A&F's CEO, said in a statement that the retailer has made progress in stocking trendier clothing and said the progress is "clearly evident" in its back-to-school business.

 

 

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