Abercrombie & Fitch (ANF, Financial) has surprised with its performance this year. The retailer was weak in 2013, yet it has picked up almost 20% so far in 2014. Indeed, Abercrombie has outperformed the likes of Aeropostale (ARO, Financial) and American Eagle (AEO, Financial) by an enormous margin. Its performance has been strong, and the turnaround strategies are well-laid out, which is the reason there's a decent risk that Abercrombie may keep performing admirably later on.
Good going
Abercrombie has performed much better than American Eagle and Aeropostale, whose sales declined by much bigger amounts. The company is undertaking a number of moves to improve its business, and get once again on the development track. Considering the performance in the last quarter, it would appear that its strategies are working.
Teens are Abercrombie's target customers. At the same time, because of a testing nature, they are missing the mark concerning cash. Additionally, teens are losing interest in logo-driven clothes, while the approach of online shopping has also prompted a change in shopping conduct.
Expansion moves
Abercrombie is also searching abroad for development, especially in Asia. It has extended its footprint in Asia by way of its A&F flagship store in Shanghai. This new location has gotten positive response from customers, which could be gauged from the way that it included in excess of 30,000 new Weibo followers after its opening.
Its Hollister stores in China are doing great so Abercrombie plans to open four extra stores in China this year. Its immediate-to-consumer business is also developing at a considerably fast pace in China, and administration believes it will improve with the dispatch of its nearby website.
Abercrombie's other global markets are also doing admirably. The volume of sales at its Hollister stores in Japan were impressive in the quarter. Presently, the organization is going to open two extra stores in Japan as it sees significant development opportunity.
Abercrombie has also made its move into the Middle East a Hollister store in Dubai. Truth be told, this store recorded the highest Hollister volume all inclusive. After such an empowering performance, Abercrombie is anticipating open more stores in the Middle East.
To enhance its performance further, Abercrombie has increased its focus on showcasing. It has affirmed the opening of Hollister House, which is a key part of its new Hollister advertising battle. This new idea will support major computerized advertising campaigns across numerous platforms.
The organization also plans to invest in its stores, which will be a piece of an activity to increase brand engagement. Its test stores put in a strong performance, and consequently, it plans to reveal the new design in 75 to 100 stores before the year's over.
In front of peers
On the back of its strategies, Abercrombie seems to be pulling in front of its peers. Actually, Aeropostale has chosen to close a massive 125 P.S. stores this year as it undergoes course amendment and aligns itself with current business sector trends.
Aeropostale is now looking at the P.S. mark through different sales channels. Furthermore, Aeropostale will add more labels to its portfolio going ahead. These moves may result in improvements, however Abercrombie has officially actualized such measures and is aggressively focused on its computerized promoting moves.
Conclusion
Abercrombie is sure that the strategic moves it is making, such as investing in key global markets, restructuring and repositioning its U.S. stores and decreasing costs, will help the organization drive significant improvements. As such, investors should certainly examine Abercrombie as it would seem that a decent turnaround play.
