Abercrombie & Fitch Closing 180 Stores By 2015
Abercrombie & Fitch, the Ohio-based teen retailer, plans to close 180 of its U.S. stores by 2015, CEO Mike Jeffries told analysts on a conference call Wednesday.
Unlike its flagship in New York City -- where buff men in minimal clothing lure shoppers around the clock -- many of Abercrombie's 1,014 U.S. stores are under-performing, tucked away in the empty hallways of aging malls. Apparently, you can't just stick shirtless models outside of every store.
By closing unprofitable locations, Abercrombie hopes to elevate its brand image as well as its profit margins. The 180 stores announced today are only the latest in a string of closures: last year, Abercrombie closed 71 U.S. stores, including 68 during the busy holiday shopping season. The company did not specify where the new closures will occur.
Meanwhile, Abercrombie is opening new locations abroad. With the U.S. economy still rocky, retailers like Abercrombie and Gap Inc. are fleeing to Europe and Asia in search of shoppers with deeper pockets.
In Europe, Abercrombie has expanded aggressively, opening seven flagships and 62 Hollister stores since 2007. Yet even this initiative is now hitting economic road bumps. Abercrombie's store traffic and sales slowed down over the past year, as Europeans cut back on spending in the face of a worsening debt crisis.
Asia, it seems, is the next frontier. Abercrombie & Fitch opened its first Singaporian store in December and its first Chinese store, a Hollister Co., in Hong Kong in August. A third Chinese location is slated to open in March. "We see growing awareness and familiarity with our brands in China as a major opportunity," said CEO Mike Jeffries on Wednesday’s call.
In Europe, much of Abercrombie's success came from the appeal of its upscale but casual all-American image. Whether this will seduce Asian shoppers -- and whether the company can snatch back the attention of teens at home -- remains to be seen.