Abercombie said in conjunction with its earnings report it will close three more flagship stores, including Abercrombie stores in Japan and Italy, and a Hollister store in New York. The reason for doing so is simple: consumers are "not responding" to large store formats, Horowitz told CNBC.
Instead, consumers are "really enjoying" smaller stores that boast a "more intimate feel" and a more personalized one-on-one interaction, the CEO said.
Why It's Important
Aside from large flagship stores in global cities, the company will also close big stores in malls and move to a smaller location nearby that takes up less square footage. This could also be seen as a function of lowering exposure to mall traffic in the U.S., which has been "declining for several years."
Abercrombie is on track to end 2019 with more stores than it had in 2018 but total square footage will decline, Horowitz said. Encouragingly, smaller stores are expected to bring in the same amount of sales if not more than larger stores. As such, the company's game plan will likely prove to be a "positive profitability move" over time.
After falling in Wednesday's session, Abercrombie & Fitch traded lower by another 7 percent to $17.06 per share at time of pubcaltion Thursday.
Abercrombie & Fitch Plummets 20% Following Q1 Earnings
Is Abercrombie & Fitch Back In Fashion With The Street?
Photo courtesy of Abercrombie & Fitch.
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