Abercrombie continues to cut prices
New Albany, Ohio Abercrombie & Co. plans to continue its uncharacteristically high levels of discounting through the spring in order to boost store sales, according to the Wall Street Journal.
CFO Jonathan Ramsden said it is willing to sacrifice margins if necessary to improve sales, according to the report. Average unit prices, which were down 14% in February on higher discounting, will continue to be "down quite significantly" for the first half of the year.
The company is also in the process of examining its real estate portfolio and has identified more than 200 underperforming stores. About half of those are locations with leases that come due in the next three years, the report said, at which point the company will vacate the space.
The bulk of the store closures will be in its namesake brand.
"The solution is to reduce the footprint, refocus more and reposition upwards," Ramsden said.
The company doesn't expect a dramatic reduction in square footage for its lower-priced Hollister brand, but it will continue its promotions to bring down average prices at Hollister, the report said. It is also in the process of sourcing goods at lower costs.
Abercrombie's biggest opportunities for growth come from its international business, the report said. It plans to open Abercrombie & Fitch megastores in Copenhagen and Japan later this year, with another in Paris for spring 2011.