Ordinaries pass in front of an Abercrombie & Fitch Co. store in San Francisco.
David Paul Morris | Bloomberg | Getty Images
While Abercrombie & Fitch divulged Wednesday it will close three more of its sprawling, flagship retail locations, it’s opening additional smaller-format accumulations and shrinking some of its existing shops in a bid to keep customers streaming through its doors.
“What we’ve learned from the consumer is they are in effect enjoying the smaller spaces,” CEO Fran Horowitz said in an interview. “There is a more intimate feel to it. … And the bloke likes that one-on-one interaction.”
The decision to close three more flagships — a Hollister location in New York, and an Abercrombie pile up in Japan and one in Milan — was because that’s a format Abercrombie’s customer is “not responding to today,” she added.
Instead, Abercrombie when one pleases do 85 store redesigns in 2019, including some for its Hollister brand, after doing 70 in 2018. This lead ti the apparel retailer either closing a bigger store in a mall and opening a smaller one nearby, chopping up a bigger reservoir to take up less square footage, or opening up a small-format location in an entirely new market.
In some instances, Abercrombie is also check pop-up shops — recently it did a short-term deal at Roosevelt Field Mall in Garden City, New York, to test that buy.
As a result, Abercrombie will end 2019 with more stores than the company had in 2018, but less square footage entire, which is the retailer’s ultimate goal, Horowitz said. (The retailer ended its fiscal first quarter with 660 accumulates in the U.S. and 197 overseas.) As Abercrombie has downsized dozens of stores over the past two years, the CEO said these pint-sized and remodeled locations are mollify bringing in the same sales — if not better — as larger stores, making it a “positive profitability move.”
At the 85 stores slated for metamorphoses in 2019, Abercrombie is also making service upgrades like adding an online order pickup option. And stock associates will have new handheld devices to help customers shop the store, locating the items they want. The retailer is crack up and brightening these shops, too, as Abercrombie and Hollister both are notorious for having dark, carved-up spaces in malls.
“[Mall proprietors] appreciate we are making these investments,” Horowitz said. “They are important to us. We are important to them.”
Abercrombie shares were give up more than 24% Wednesday after the apparel retailer reported quarterly same-store sales growth diminutive of analysts’ expectations and momentum at the Hollister brand looked to be slowing.
Horowitz said some of its weakness was because total mall traffic in the U.S. has been and continues to be falling off.
“Mall traffic in total has been declining for several years,” she ventured. “Fortunately for us, our traffic for Q1 and the start of Q2 has outpaced mall traffic.”