Nov 18, 2016
Gap and Abercrombie & Fitch slump on unhappy holidays
Abercrombie & Fitch's stock fell 13.9% on a poor sales and a weak outlook. Neil Saunders, chief executive of Conlumino, the retail research company, pinned the blame for Abercrombie & Fitch's poor figures on a failure to communicate with customers about the changes it has made to its fashion lines. Once known for its picture-perfect models and sales assistants, as well as Abercrombie & Fitch monogrammed garments, the retailer has shifted "Towards a more inclusive and gentler approach with an emphasis on stylish, quality clothing", said Mr Saunders. A "Confusing" marketing campaign, poor foot traffic at both its flagship and mall-situated shops and warmer weather resulted a 6% fall in third quarter sales to $821.7m and an 80% slump in profit to $7.9m. Abercrombie & Fitch said it expects business to remain challenging for the rest of the year, which includes Black Friday, the post-Thanksgiving Day shopping jamboree, as well as Christmas and the New Year. While its Old Navy brand thrived with revenue up 3%, sales at Gap Global and Banana Republic both fell by 8%. The management at Gap, under chief executive Art Peck, has been struggling to stop a continuing slide in turnover.
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