Abercrombie & Fitch Co. Now Plans to Discount

Abercrombie & Fitch Co. recently announced that despite prior pledges not to discount, due to poor quarterly sales, the mall chain has decided to reverse its policy and discount merchandise. Lowering prices to boost sales is an about-face from its previous strategy of keeping prices high through the recession. Abercrombie joins suit with Aeropostle and American Eagle who have already slashed prices, however it may be too little, too late as shoppers have deserted the chain for other teen retailers that have implemented more sales. Abercrombie had argued that while significant price cutting would boost sales it would destroy its high-end image and the company’s pricing power. Abercrombie reported a 24% decline in revenue for the quarter ending May 2, while sales at stores open for more than a year, a key measure of retail health, fell a sharper...

Abercrombie Pricing

There have been numerous news reports that mall chain store Abercrombie has staunchly opposed reducing prices in stark contrast to the rest of the retail world. Reuters is reporting that a steady sales decline has many rethinking this strategy, especially when consumers in this market are only interested in steep markdowns. “We’re in a different consumer environment. We’re in trench warfare with the consumer,” said Jefferies & Co analyst Randal Konik. “My fear is you have companies in the aspirational segment with aspirational price points … that are having real struggles.” Abercrombie’s shares trade close to $21, down from a high of more than $82 hit in...