In June 1999 the boy band LFO released the hit summer single “Summer Girls” which included the line “I like girls who wear Abercrombie and Fitch.” At the time, the Abercrombie and Fitch Co. (ANF) apparel line was a smash hit with young consumers, and it made perfect sense for a band marketed towards preppy teens to name-drop a preppy teens’ clothing line of choice.
But the young people who listened to LFO and wore Abercrombie and Fitch (stylized "A&F") in its late 90s and early aughts heyday have grown up and moved on, and today’s youth have failed to latch onto the brand. One might even go as far as to say the brand had become passé. A teen pop song extolling A&F today would sound about as unthinkable as a pop song extolling bellbottoms.
The New Albany, Oh. company’s slide into total irrelevance came to an apex on Aug. 22. A&F released its second quarter 2013 earnings report, and the numbers were abysmal, falling short of even their own estimates.
A&F has been trying to stop the bleeding for some time now, announcing in 2012 that they would close 150 stores. In Feb. 2013 they announced they would close an additional 40 to 50 in the US. Same-store sales – the true marker of retail strength – have also been incredibly disappointing for the brand, dropping 11 percent, with a whopping 13 percent drop at sister apparel brand Hollister.
As the company quickly loses ground to retailers like Forever 21 and H&M, and same-store sales continue to drop, the company will need a miracle – or at least, another LFO – to make them relevant again.
For their second quarter 2013 earnings report, Abercrombie and Fitch reported a net profit of $11.4 million, or $0.14 per share, versus the net profit of $20 million, or $0.20 per share, from the same period a year ago. Revenue for the quarter was $945.7 million, as compared to $951.4 million from the previous year. Analysts were expecting a profit of $1.06 per share on revenues of $996.2 million.
Abercrombie and Fitch’s own guidance had been far more modest, at 40 cents a share, which they still missed considerably.
A&F stock plummeted on the earnings report. They're down 18.25 percent to hit $36.42 a share.