ANALYSIS: Abercrombie & Fitch needs domestic revival
US retail chain Abercrombie & Fitch aims to mirror the popularity of its international flagships closer to home, after posting a fall in full-year sales today (16 February).
The company reported a 16% drop in sales for the year to US$2.93bn, from $3.48bn last time.
For the fourth quarter, sales fell 5% to $936.0m, despite international sales leaping 86% to $142.9m.
Mike Jeffries, chief executive officer and chairman of the board of Abercrombie & Fitch, says the company is working "obsessively" to improve its domestic business though, while closing under-performing stores.
Speaking on a conference call today he said: "We are working ourselves as hard as you can imagine to get domestic productivity increased. We are doing it through fashion to reach a more competitive state.
"I feel more positive about the domestic business than I have for a long time".
Meanwhile, Abercrombie & Fitch completed the closure of its Ruehl branded stores during the fourth quarter. While charges resulting from the closures dragged on the bottom line - $56.1m - the company wants its remaining brands to remain aspirational.
During fiscal 2009, the company opened 24 new stores, 11 domestically and 13 internationally, and closed 53 stores, including 29 Ruehl stores.
During the fourth quarter, Abercrombie & Fitch opened a flagship location in Tokyo, as well as five Hollister mall-based stores in Europe.
This year it expects to open Abercrombie & Fitch flagship stores in Copenhagen, Denmark and Fukuoka, Japan and a Hollister Epic store on Fifth Avenue in New York.
The company also plans to open 30 international mall-based Hollister stores, including launches in "two or three" new markets.
Jeffries told analysts the company expects $200m from international stores during the coming year.
He added: "International expansion is firmly in our grasp and is the future of our brand.
"We have learned that there is huge demands for our brands around the world, and clearly saw that though results last year in Europe, the UK and Japan."
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