Abercrombie sales are continuing to plummet, the company’s shares now reaching a record low. This Friday, November 18th, shoppers seemed to have boycotted the store as Abercrombie’s sale records plunged, marking a veritable black Friday for the company.
Abercrombie Sales Have Never Been So Low
Shoppers seemed to have planned a silent boycott as the number of people who shopped this week at the reputable retailer’s stores reached a new low. Due to this week’s weak performance, the company’s third quarter sales reports are not looking good, the problem also being reflected into their share value.
Abercrombie and Fitch’s shares have dropped by 14.9 percentage points in the last week, a single share now being worth $14.90. Pre-market trading officers are invoking a “disappointing performance,” blaming the flagship brand of week marketing.
The retailer has been struggling since the beginning of the year. During the first quarter of 2016, Abercrombie’s sales went down 7 percent. In the second quarter, the decline was one percent higher, followed by the disastrous 14 percent in the third quarter.
What Caused the Retailer’s Downfall?
Abercrombie’s weak performance is due to both poor marketing and strong competitors. Fast fashion producers such as Forever 21 and H&M are stealing the spotlight, causing a total loss of revenue of over $821 billion, this year alone.
S&P Global Market Intelligence predicted a net income of roughly $15.4 million for the first three quarters of 2016. However, the retailer did not even manage to reach half of the predicted earnings, registering a total of $7.9 million.
The good news is that Hollister, the company’s smaller brand, is doing a much better job at increasing its revenue and keeping clients in their stores. After a year of registering a flat revenue, Hollister’s sales increased during the last quarter thus saving the flag company from drowning in a sea of negative prospects.
Will the Company Ever Manage to Regain Its Influence?
Abercrombie used to be the focal point of tourists, fashionistas fighting over discounted items over the seasonal sales. Now, foot traffic has considerably decreased, the poor sales reflecting into the quarterly reports.
Arthur Martinez, the retailer’s executive chairman, declared that the company will try and get past this challenging fiscal year. Mr. Martinez also hinted at a possible rebranding as he stated that Abercrombie and Fitch will continue to work on customer experience, product, and marketing.
Abercrombie sales have been down before, especially during the latest economic crisis when designer clothing was put in second place. It is possible that the company will get out of this tight spot if they put in the extra effort.
Unfortunately, this holiday season will not improve the retailer’s earnings. Representatives stated that they expect Abercrombie sales to rise, but not at astronomical rates.
At the moment, Abercrombie and Fitch has over 900 stores located all over the world.
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