Specialty teen clothier Abercrombie & Fitch has been struggling of late, and was actually up for sale for a little while. Apparently, though, investors have not been very happy with the offers; shares fell roughly 10 percent by market open, Monday.
You may recall that in May, the retailer was in talks with a handful of parties to discuss a potential deal but now the update is that negotiations have ended. Potential buyers could have been competitors like Express and American Eagle Outfitters. It seems more people are opting for lower-cost, fast-fashion chains like Forever 21 and H&M. Indeed, these stores are far more affordable but also offer a bit more selection that A&F and this has led to massive sales decline in one-time mall mainstays like Abercrombie & Fitch Co and other companies like Wet Seal (which has suffered a similar fate).
Accordingly, the New Albany, OH-based company has said that sales continue to hold strong through California surf-inspired sister chain Hollister and that they are continuing to develop ways to improve the performance within the flagship chain. Sales in Hollister have risen 3 percent.
Alas, Abercrombie & Fitch could not reach an agreement with any of its potential buyers. As such, A & F chairman Arthur Martinez commented, “We believe in the prospects for our business and the opportunities for our brands. We are committed to taking sound, aggressive action to deliver enhanced performance and long-term stockholder value.”
In addition, A & F CEO Fran Horowitz has been looking for ways to save the struggling namesake company. The company launched a new marketing campaign only a few months ago in an effort to reposition the brand—which is now sans logo—but that was to no avail. Unfortunately, the market is already saturated with companies who beat them to the anonymity punch.
Obviously, this has not been an easy time for traditional retailers. Long time industry standouts like Sears and JCPenny continue to report slowing sales, and continue to close stores in the process. Retail valuations are plummeting around the world as internet-based retail continues to thrive. With that in mind, Abercrombie & Fitch are likely to find themselves nearing the same fate if they cannot sort this investment and progress angle out soon.