Paris–Abercrombie & Fitch said this week it plans to shutter another 180 stores as the teen retailer hopes to shave costs and bolster its profits.
Speaking at a Deutsche Bank consumer conference here, Jonathan Ramsden, chief financial officer, said most of the closings will be at its Abercrombie & Fitch stores, its kids stores and “with a smaller number of closures” at Hollister.
Ramsden said most of these closures have been through “natural” lease expirations, but there have also been a “limited number” of buyouts.
Abercrombie & Fitch has already closed some 135 stores on the last two years in an effort to keep costs in line as expenses, such as cotton, increased. Sales have been strong in the last two years, too, especially in its growing international business. But increased promotions and rising raw material costs have eaten into profits.
However International Expansion Continues
In May, the company reported that its first quarter profit plunged 90% and comparable store sales were disappointing.
The store closing will likely be focused on North America since Ramsden reiterated the company’s plans to continue “our highly profitable international rollout strategy.”
Abercrombie’s international stores have “been highly profitable with both gross and four-wall margins well above our U.S. rates and we expect to get a continuing mix benefit from that as our international business continues to grow,” Ramsden said.
At the end of its first quarter, Abercrombie & Fitch operated 1,049 stores consisting of 279 Abercrombie & Fitch stores, 154 abercrombie kids stores, 491 Hollister Co. stores and 18 Gilly Hicks stores in the United States. The company operated 15 namesake stores, five abercrombie kids stores, 84 Hollister Co. stores and three Gilly Hicks stores internationally.