Abercrombie & Fitch Co., the global retailer of casual luxury apparels and accessories under the Abercrombie and Fitch, Hollister and Abercrombie Kids labels, has announced to shutter 60 Abercrombie and Hollister stores this year, in a bid to improve its financial standing.
However, the company is yet to confirm which stores it would be closing down in the coming months.
The fashion retailer has already closed more than 400 stores since 2010 and 60 per cent of its leases will expire in the next 10 years. Last year, it shut approximately 40 stores.
The news related to the closure of Abercrombie stores has come close on the heels of the announcement of its financial results for the fourth quarter and fiscal 2017. It reported a 15 per cent increase in net sales to US $ 1.193 billion during the fourth quarter and a 5 per cent increase in the year under review to US $ 3.493 billion.
Comparable sales for reporting quarter also increased by 9 per cent and 3 per cent for the year, with Hollister up 11 per cent and Abercrombie up 5 per cent during the quarter. Operating income for the retailer registered a twofold increase to US $ 140.3 million for the quarter and US $ 72.1 million for the full year.
The increase in operating income has come after it reported a struggling financial condition in 2016 when its operating income tumbled to US $ 15.2 million from US $ 72.8 million in 2015.
According to CFO Joanne Crevoiserat, strong direct-to-consumer sales and improved traffic at stores helped it to post growth in the quarter.
“The year 2017 turned out to be a year of significant progress which includes the growth of Hollister, Abercrombie returning to positive comparable,” added Fran Horowitz, Chief Executive Office of the company.
Despite an overwhelming financial report previously, the fashion company has announced the closure. It is being said that via shuttering of stores Abercrombie is investing in upgrading current retail locations. It even introduced a new store prototype. These spaces are smaller and more open compared to the previous ones.
The retailer created 7 new Abercrombie prototype stores, trimmed 16 of its stores, and shuttered 39 stores in 2017.
“We will continue to improve the customer experience with the ongoing investments in loyalty programmes, stores, direct-to-consumer and omni-channel competences,” reportedly said Horowitz.
