Abercrombie cuts 150 HQ jobs amid sales woes

Dive Brief:

Abercrombie & Fitch has laid off 150 of its 2,200 workers at its New Albany, OH headquarters, the Columbus Dispatch reports. A company spokesperson confirmed the news to Retail Dive.
The move is "to ensure we are structured appropriately for the current retail environment," the spokesperson told Retail Dive in an email. "We appreciate the contributions these associates have made while with Abercrombie & Fitch and we will make certain that they are treated fairly and with respect through this process."
In November, CFO Joanne Crevoiserat told analysts that half of Abercrombie & Fitch’s 745 U.S. store leases were up for renewal in the coming 18 months, presenting an opportunity to shutter stores without leaving too much money on the table.

Dive Insight:

The retailer’s Hollister brand is faring better than its flagship, with a clearer appeal and lower prices, but that hasn't provided enough of a lift. Changes that Abercrombie has made to marketing, stores and merchandise have been slow and seem to be going largely unnoticed by shoppers.

In November, the company reported its 15th straight decline in quarterly sales: Third quarter sales fell 6.5% from last year to $821.73 million, and Q3 same-store sales fell 6%. The company’s Hollister brand fared better, with Q3 net sales falling 13% to $358.3 million at Abercrombie, but falling just 1% to $463.5 million at Hollister, compared to the year-ago period.

“A&F has much more work to do in building a new base of customers and we maintain that this is a long term effort that may not have a tangible impact on sales for many quarters,” Neil Saunders, retail analyst at GlobalData (formerly Conlumino), told Retail Dive in an email. The turnaround is going in the right direction but will take time, endurance and possibly heavy promotions, he added. "[T]he company cannot turn on a dime and there will likely be a number of bumpy quarters ahead before recovery comes.”

But patience could be a big ask at a time when specialty retailers in the teen apparel space are stumbling badly. Earlier this month The Limited shuttered all stores, its website and filed for bankruptcy, meanwhile the American Apparel brand was sold for $88 million to Canadian T-shirt company Gildan, which declined to take on any of its retail business. Just this week, Wet Seal said it will shutter all stores and lay off 148 employees at its Irvine, CA headquarters by March 21.