What went wrong (and right!) for Abercrombie & Fitch in 2013


Oct. 29 2019, Updated 5:57 p.m. ET

Year-to-date 2013 results

Abercrombie & Fitch (ANF) reported net sales of $1.033 billion for the third quarter of full-year 2013, a decrease of 12% from net sales of $1.170 billion during the third quarter of fiscal 2012. The net sales decrease was attributable to a 14% decrease in total comparable sales, partially offset by new international stores. Including direct-to-consumer sales, U.S. sales decreased 18%, to $674.9 million, and international sales increased 2%, to $358.4 million. The impact of changes in foreign currency benefited sales by approximately $6.6 million for the 13 weeks ended November 2, 2013. Gross profit margin declined to 63.0%, compared to 64.3% for Q3 of full-year 2012 with an operating loss of $35.4 million for Q3 of full-year 2013 compared to operating income of $133.3 million for Q3 of full-year 2012.


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Net Sales 13 Weeks Ended May 4, 2013

Net Sales 13 Weeks Ended August 3, 2013

Net Sales 13 Weeks Ended November 2, 2013                        

Total Net Sales to November 2, 2013

Net Sales





United States





International Stores





Direct to Customer Ops





Source: Company Filings


Engaging a notoriously capricious teenage clientele has never been so hard

Results for the third quarter of fiscal 2013 reflect continued weakness in top line performance, with sales declines across all segments and brands in all quarters except online sales or the “direct to customer ops” segment. The segment reported 34% year-to-date gains in 2013, to $462 million, compared to the comparative period in 2012, whereas net sales overall declined 7%, to $1.5 billion.

YoY Growth % 13 Weeks Ended May 4, 2013

YoY Growth %  13 Weeks Ended August 3, 2013

YoY Growth %  13 Weeks Ended November 2, 2013                        

YoY Growth % to Nov 2 2013

Net Sales





United States





International stores





Direct to Customer Ops





Source: Company Filings


Chief reasons why teen retailers were out of favor last year

  1. Being more responsive to changing trends with a lower turnaround time, fast fashion brands like Zara & H&M (both private) continue to benefit from design and supply chain efficiencies at the expense of brands like Abercrombie & Fitch (ANF) and American Eagle Outfitters (AEO), which are now increasingly perceived as “unhip.”
  2. Higher unemployment rates at 25% among 16-to-19-year-olds last summer also impacted sales significantly. “The reasons for the weak traffic we’ve seen in the U.S. are not entirely clear. Our best theory is that while consumers in general are feeling better about the overall economic environment, it’s less the case for the young consumer,” said Abercrombie chief executive officer Mike Jeffries in a conference call.
  3. Teenagers are more likely to follow brands with a high social media profile, like Juicy Couture (FNP). The rise of mobile commerce and use of smartphones require fashion brands to also invest in mobile sites or they risk being left out in the cold.
  4. The elephant in the room could be Amazon (AMZN), whose New York studio is the centerpiece of Amazon’s bid to become the go-to stop for web shoppers looking to fill their wardrobe. And Amazon is betting that its huge studio investment—the company wouldn’t disclose the cost—will give it an advantage over brick-and-mortar retailers.

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