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Abercrombie & Fitch Shifts Focus To Smaller-Format Stores

Abercrombie & Fitch Shifts Focus To Smaller-Format Stores

Abercrombie & Fitch will close three flagship locations as the retailer concentrates on smaller brick-and-mortar stores. The closings include a Hollister location in New York City and Abercrombie stores in Japan and Milan, Italy.

The retailer’s plans also include redesigning 85 stores in 2019: closing larger mall-based stores and opening smaller versions nearby; shrinking larger stores to take up less square footage; and opening small stores in new markets. Abercrombie & Fitch is aiming to have more stores in 2019 than 2018 but with less overall square footage, said CEO Fran Horowitz in an interview with CNBC.

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“What we’ve learned from the consumer is they are really enjoying the smaller spaces,” said Horowitz. “There is a more intimate feel to it...and the customer likes that one-on-one interaction.”

Abercrombie & Fitch has closed approximately 475 stores over the past eight years and the retailer started shrinking its remaining stores two years ago. The smaller locations still bring in the same or better sales, and the company plans to further boost performance by equipping associates with handheld devices that can help them assist customers in-store.

However, the retailer’s turnaround efforts may be slowing down. Comparable sales growth slowed to 1% in Q1 2019, compared to 5% last year and 3% in the previous quarter. Net sales rose to $734 million, but the company reported an operating loss of $27.3 million.

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