Abercrombie & Fitch, an American retailer, said on Wednesday that the company would be shutting 60 stores later this year.
The teen apparel retailer, who also owns Hollister, has been reconfiguring its store fleet in malls as more consumers are choosing to buy clothes online. In 2017, the company has closed almost 40 stores, having previously planned to close 60 sites. Meanwhile, Abercrombie & Fitch has closed 50 shops in 2016.
According to the company, some of its leases are up for renewal by the end of the fiscal year, which gives the company a flexibility to move out without fighting property owners.
However, Abercrombie & Fitch did not disclose which locations would be closing this year.
In 2018, U.S. mall owners have already been met with a handful of significant store closure announcements, followed by what seen as a strong holiday season for many companies.
While Abercrombie is closing some of its stores, the company has been investing to upgrade its existing locations. Last year, the company has rolled out new store prototypes, which are smaller and more open.
“The [teen apparel] group as a whole, and Abercrombie in particular, has tightened up their inventory, pricing and store/mobile experience,” said Ken Perkins, the founder of Retail Metrics.
“Zumiez and American Eagle have generated positive comp increases … with Abercrombie’s Hollister joining the party about a year ago,” he added.
Meanwhile, dwindling mall traffic remains a concern for these apparel retailers, “but things have definitely improved from this time last year,” Perkins stated.
Abercrombie & Fitch Stock Went Up 12%
Abercrombie reported on Wednesday strong earnings results for the holiday period. This helped boost the stock of the company to more than 12 percent.
According to a survey, the same-store sales went up 9 percent overall for the fourth quarter, exceeding analysts’ forecasts for growth of 7.4 percent. Meanwhile, same-store sales for the Hollister banner jumped 11 percent.
As part of its turnaround plan, the teen apparel retailer has removed its immodest campaign ads. In addition, the company has pushed more merchandise without many flashy logos.
“We continue to improve the customer experience with ongoing investments in loyalty programs, stores, direct-to-consumer and omnichannel capabilities,” said Fran Horowitz, CEO of Abercrombie & Fitch.
As of now, Abercrombie shares have increased more than 30 percent in 2018.
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