A&F Closed 62 Stores In The US Last Year

A row of abdominal muscles, male fashion, attracted a large number of fans to watch, and even some customers lined up in the morning. Many Chinese consumers are impressed by the landmark marketing method of the US youth clothing retailer Abercrombie & Fitch Co. (ANF.NYSE) (the "A&F") opened in the first flagship store in mainland China, Shanghai Jingan Kerry Center in April this year.

However, due to its bad performance, A&F recently announced its announcement before the US stock market. Its CEO and board member Mike Jeffries retired and the decision came into force immediately. News prompted the A&F stock price rose 7.8%.

According to the financial report, in the third quarter ended November 2nd, the overall sales of A&F group fell by 12% to 911 million 400 thousand US dollars, lower than the expected US $916 million after the market cut. The adjusted net profit dropped by 25% to 30 million 400 thousand US dollars due to the decrease in the number of people in the mall and the increase in discounts, while the same store sales decreased by 10%, of which the US market dropped by 7% and the international market fell by 15%.

"Continued weakness in store traffic, especially in the European market, shows signs of slowing down. This is the reason for the disappointing third quarter results. In addition, the decline in sales of A&F logo products is also causing pressure on the company. The company will continue to reduce such products to meet consumer demand." A&F CEO Mike Jeffries said.

This is one of A&F's consecutive poor performance reports. As of February 1, 2014, the A&F group's total revenue in the fourth quarter of fiscal year decreased by 12% to $1 billion 300 million, and net profit shrank from $157 million 200 thousand in the 2012 fiscal year to 66 million 100 thousand US dollars.

At the beginning of this year, under the open pressure of radical investor Engaged Capital LLC, A&F group had to make a series of personnel changes. First, the group announced that the chairmen and CEO positions would be separated, and Michael Jeffries would no longer serve as chairman of the board.

Since then, Engaged Capital LLC has been pressing the A&F group to reshuffle its board of directors, replacing four of the former nominees with retail sales. Costume experience Independent directors.

Founded in 1892 in A&F, New York, it has a total of Abercrombie & Fitch, Abercrombie Kids, Hollister and other sub brands. Men's wear Women's clothing, children's clothing and other products, located in the University consumer group, is the American leisure clothing brand.

Today, the clothing brand that has been most popular among American teenagers is being attacked by the fast fashion brands such as H&M, Forever 21, Zara, and the change of consumption habits such as e-commerce.

In comparison, the world's second largest clothing Retailer H&M announced the third quarter results as at the end of August, showing that the post tax turnover increased by 21% to 38 billion 805 million kronor ($5 billion 420 million) and net profit of 5 billion 296 million kronor (740 million US dollars), representing an annual growth of 20%.

"No matter from design or price, A&F and other traditional youth clothing can not compete with fast fashion brands." A garment industry insider told the first Financial Daily reporter that he had to face transformation.

In addition to personnel adjustment, A&F's transformation strategy also includes plans to "increase" the group's A&F brand of its namesake brand, and is ready to create new product classification, market planning and price positioning for older consumer groups. At the same time, it will transform its brand Hollister into a fast fashion brand. At the end of January this year, Arthur Martinez, who just took over as chairman of the board of directors of the group, said it was discussing with suppliers to establish a fast response supply chain. In addition, A&F also plans to improve the business of product classification, procurement and inventory.

For the retirement of Mike Jeffries, A&F group said in a statement that the board has hired headhunting companies to identify the successor of Mike Jeffries from within and outside the group. The group's former non executive chairman, Arthur Martinez, will become the executive chairman and lead the team in charge of the daily operation of the group until the new chief executive takes office.