Abercrombie puts itself up for sale
Abercrombie used to be the epitome of “cool”. The apparel company made a splash in the 1990’s with its prominent logos and scandalous ads featuring shirtless men. The fad has since subsided, and Reuters reports that the brand has put itself up for sale.
Abercrombie is working with an investment bank, Perella Weinberg Partners, to manage takeover approaches from other retailers. While the deal is not officially confirmed, Abercrombie is a likely acquisition target, with shares at a 17-year low. Both the company and Perella Weinberg declined to comment on the subject.
Can;t hang with online shoppers
Overtaken by competing retailers — both online and offline –Abercrombie’s operating income decreased from $72.8 million in 2015 to just $15.2 million last year. operated almost 900 stores in the US and overseas combined at the end of January, and currently has a market capitalization of $862 million.
The company attempted to revamp its image in 2014: they redesigned their logo, rearranged their executive suite, and bolstered its board of directors, but to no avail.
Earlier this year, Abercrombie announced it’s been trying to slash costs and intends to downsize by laying off 150 employees and closing about 60 US stores, on top of the stores it has already closed.
Abercrombie is not alone in its fall from glory. Mall traffic in general has declined, bringing other teen retailers like Aeropostale Inc, Wet Seal and BCBG Max Azria down with it. All three companies filed for bankruptcy in the past two years.
Wave goodbye to the moose
Is Abercrombie gone for good? Maybe not. The company still has faint hope for its Hollister brand. This beachy brand has managed to keep its same-store sales flat for the past two years despite Abercrombie’s overall decline in sales.
However, things aren’t looking good for the former teen favorite.
Hipsters these days just aren’t into branded clothing. They’ve ditched logos and turned to boutiques and secondhand stores — even boutiques selling new clothes that look secondhand.
What will become of the brand should the alleged deal go through? Which retailers will take over the struggling brand? We’ll just have to wait and see, but regardless of what happens, we’ll always remember Abercrombie.
#RIPMoose
