Abercrombie & Fitch have been facing several difficulties in terms of sales lately. Even though the clothing brand has gone and changed some of its marketing policies in order to make things better, it seems their earnings have yet to become what one would call satisfying and are still going all the way down.
The numbers from the third quarter turned out to be disastrous for Abercrombie, as the company’s sales suffered another fall of 12%. Despite previously expecting per-share earnings of $2.15 to $2.35 each, their predictions have now reached the new lows of $1.50 to $1.65. According to former CEO Mike Jeffries:
“The third quarter proved to be more difficult than expected. Traffic improved in August but then declined significantly in September and October. It is very clear that the young apparel sector in which we operate is going through a period of disruption and turmoil. We expect conditions to remain difficult [for the rest of the year].”
After a series of hopeful statements prior to that one, Jeffries is no longer the CEO of Abercrombie. Other reasons behind his removal were his inabilty to manage finances properly, his words that excluded several people from the brand’s target groups and his lover’s inappropriate inclusion in serious matters regarding the company.
Eric Beder of Wunderlich Securities claims that there is only little left to do on Abercrombie’s behalf, as several extreme measures taken failed to bear fruit. It’s true that the apparel industry promised to decrease the number of fancy logos and the in-store perfume. On the one hand, they allegedly didn’t entirely go through with those; on the other, it’s claimed that they’ve been working things out slowly but steadily, and things aren’t as bad as they’re made out to be.
With teenagers showing their preference to spending money on food or technology, as well as choosing to buy their clothes from cheaper brands such as H&M, it’s only normal that the company is taking a downfall.
Do you think there is a way back for Abercrombie? Leave a comment below and let us know.
Keep Up With PopWrapped On The Web!
