On Wednesday, Abercrombie & Fitch announced plans to close up to 60 locations across its banners in 2018.
Though the retailer reported a strong Q4 sales performance, it’s still undergoing a transformation that necessitates changes in its retail strategy.
The Abercrombie group reported a net sales increase of 15 percent for the fourth quarter, ended Jan. 28. Comp sales were up 9 percent during the period on Hollister’s strength.
The group, which operates the mall-based Abercrombie & Fitch, Abercrombie Kids and Hollister concepts, has been undergoing an overhaul, which began as it tried to find a new identity after shoppers began to shy away from the logo-heavy aesthetic its labels were known for. More recently, it has been working to adapt to today’s omnichannel demands.
Abercrombie had projected 60 store closures last year but ultimately only shuttered 39 doors, as sales improved and it was able to negotiate better leases. At the end of FY17, the company operated 394 Hollister locations in the U.S. and another 144 worldwide. It had 285 U.S.-based Abercrombie stores with 45 international locations.
“We have closed more than 400 stores since 2010, with about 60% of our U.S. leases expiring over the next two years,” said executive vice president and COO Joanne Crevoiserat. “We continue to have significant flexibility to strike the right channel balance and drive efficiency by re-modeling or resizing our stores, renegotiating leases or closing stores.”
The retailer remodeled 35 Hollister stores and completed seven Abercrombie prototype locations in 2017. Of those, 16 doors were downsized.
“Our experience has shown we can drive greater store productivity through an enhanced store experience on a smaller footprint,” Crevoiserat said.
Abercrombie will open 13 Hollister locations, four Abercrombie stores and four Abercrombie Kids doors in 2018. It will continue to pursue the smaller format approach with seven Abercrombie locations and three kids’ locations downsized. Similarly, 40 Hollister will be remodeled with six moving to the smaller size.