(Adds comments by CEO, analyst, details, background; updates
By Ramkumar Iyer
Aug 28 Abercrombie & Fitch Co is finally
shedding its traditional logo-focused apparel, clothes that made
the brand one of the most sought after among teens in the past
The company's preppy t-shirts and sweatshirts have fallen
out of favor with students who are more inclined to spend their
allowances on cheaper and trendier clothes offered by chains
such as Forever 21, Inditex's Zara and H&M.
Abercrombie shares fell as much as 8.5 percent on Thursday
morning, after it reported its tenth straight decline in
quarterly same-store sales.
"In the spring season we are looking to take the North
American logo business to practically nothing," Chief Executive
Mike Jeffries said on a call.
Abercrombie is trying to revamp its image after Jeffries
stirred controversy last year by suggesting the company's
clothes were made for "cool" and "attractive" kids and not for
The company has since expanded its merchandise to include
larger sizes for women. It has also doubled down on more
fashionable clothing and slashed prices to win back teen
customers who have cut back spending in a tepid job market.
Still Abercrombie's clothes are costlier than those sold by
fast fashion rivals, which have shrunk the runway-to-shelf
turnover time to about a fortnight.
While a pair of women's skinny jeans from Abercrombie would
set a shopper back by about $75, the same could cost less than
$10 at Forever 21 or H&M, according to company websites.
Phasing out logo-centric clothes "is a good strategy and
consistent in where consumer interest lies but it is not going
to be enough to entirely turn sales," Macquarie Research analyst
Liz Dunn told Reuters.
Abercrombie's same-store sales declined 7 percent in the
second quarter ended Aug. 2 - more than the 4.1 percent dip
expected by analysts polled by research firm Consensus Metrix.
Same-store sales in the United States - the company's
biggest market - dipped 5 percent, dragged down by weak demand
at its largest chain, Hollister Co.
International comparable sales slid 9 percent. Abercrombie
will continue to sell its logo-focused apparel at international
stores, said Jeffries who had strongly defended the logo-centric
culture up to late last year.
The CEO for the past 16 years has faced heavy criticism for
Abercrombie's recent dismal performance, and was stripped of his
chairman title earlier this year.
Net sales decreased 6 percent to $890.6 million. Excluding
items, the company earned 19 cents per share.
Analysts on average had expected a profit of 11 cents per
share on sales of $909.2 million, according to Thomson Reuters
Abercrombie shares were down 3.7 percent at $42.36 on the
New York Stock Exchange in afternoon trading, after touching a
low of $40.43. They have risen 34 percent this year up to
(Additional reporting by Shailaja Sharma in Bangalore; Editing
by Saumyadeb Chakrabarty and Joyjeet Das)