The Times West Virginian


August 27, 2012

Abercrombie sales slide as half-naked models underwhelm



They spend "at least 45 percent of the time on the cell phone and interacting with people around them on what they should buy and what they shouldn't buy," he said. "It's a generation that wants to share opinions and likes opinionated brands, and neither are present in this store."

Not that Abercrombie is standing still. Even as it shutters namesake stores, the retailer is expanding a new concept called Gilly Hicks. Described in filings as the "cheeky cousin" of Abercrombie & Fitch, the chain was developed to sell underwear and pajamas to women ages 14 to 35 with an "All-American" style inspired by "the free spirit of Sydney, Australia." With 18 stores in the U.S. and seven internationally, it's faring better than the shuttered Ruehl concept, introduced in 2004 to capture 22- to 35-year-olds.

So far, Abercrombie's brand woes at home haven't infected the popularity of its model-filled new store events in untapped markets. The Hong Kong flagship store, which opened this month, generated more than $1 million in sales in its first five days, the company said on Aug. 15. Abercrombie is considering additional locations in China and the Middle East.

Still, in a hyper-connected world, it won't take long for Abercrombie's fading cool to become apparent to shoppers in Dubai and Shanghai, said Lindstrom.

The company shows no signs of changing its brand message. A page laying out Abercrombie's capital-allocation philosophy in an Aug. 15 investor presentation features a photo of two barely clothed teens making out.

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