Abercrombie store in the US

Abercrombie has reduced its earlier capital expenditures projection for fiscal 2009 from $200 million to $185 million, due to lower-than-expected construction costs and the reduction and deferment of non-essential projects related to existing stores.

At quarter end, abercrombie had $366.5 million of cash and cash equivalents along with outstanding debt and letters of credit of $79.6 million. The company repaid $100 million of US dollar-denominated outstanding debt, and obtained approximately $37 million in foreign currency denominated borrowings to fund its international lease and capital expenditures.During the quarter, the company opened its first Epic Hollister flagship store in New York, two Hollister mall-based stores in the UK, and one abercrombie outlet store in the US.

Abercrombie mulls opening nine mall-based stores in fiscal 2009 in the US, which includes two Abercrombie stores, four Hollister stores, one Gilly Hicks store, and two outlet stores. Internationally, the company intends to open 10 mall-based stores in the current fiscal year, including one Ruehl No.925 store in Canada, one Hollister store each in Germany and Italy, and seven Hollister stores in the UK.

Abercrombie & Fitch with natural

Dean, who was born without her left forearm and has worn a prosthetic limb since she was three months old, is suing for disability discrimination after she was left "personally diminished [and] humiliated" when she refused to remove her cardigan at work last summer."I had been bullied out of my job," she said. "It was the lowest point I had ever been in my life."It is believed Dean is seeking around ￡25,000 in compensation for her experiences under what she described as A&F's "oppressive regime". Her legal team would not comment on the sum.

Clothing retailer abercrombie and fitch has been accused of "hiding" a sales assistant in a stockroom at a London outlet because her prosthetic arm didn't fit with its "look policy", a tribunal has heard.Riam Dean, a 22-year-old law student from Greenford, west London, claims she was removed from the shop floor at the company's Savile Row branch when management became aware of her disability.
Dean claims that when she told A&F about her disability after getting the job, the firm agreed she could wear a white cardigan to cover the link between her prosthesis and her upper arm. But shortly afterwards, she was told she could not work on the shop floor unless she took off the cardigan as she was breaking the firm's "look policy". She told the tribunal that someone in the A&F head office suggested she stay in the stockroom "until the winter uniform arrives".
The "look policy" stipulates that all employees "represent Ruehl No.925 with natural, classic American style consistent with the company's brand" and "look great while exhibiting individuality". Workers must wear a "clean, natural, classic hairstyle" and have nails which extend "no more than a quarter inch beyond the tip of the finger".Dean said today in her evidence: "A female A&F manager used the 'look policy' and the wearing of the cardigan as an excuse to hide me away in the stockroom.
"I knew then that I was being treated different and unfairly because of my disability. Her words pierced right through the armour of 20 years of building up personal confidence about me as a person, and that I am much more than a girl with only one arm … "
Dean said the "look policy" was inconsistent: "Having visible tattoos breaks the 'look policy' and yet I've seen a worker with a tribal arm tattoo which is very noticeable and yet Abercrombie allowed him to work on the shop floor. Clearly their reasoning goes far deeper and I'm sure it's not the cardigan which breaks the look policy, it's the disabled label which does," she said.
She added: "I am born with a character trait I am unable to change, thus to be singled out for a minor aesthetic 'flaw' made me question my worth as a human being."abercrombie outlet taught me that beauty lies in perfection, but I would tell them that beauty lies in diversity, for I would rather live with my imperfection than to exude such ugliness in their blatant display of eugenics in policies and practices."
Her friend Genevieve Reed told the tribunal that Dean had changed since working at A&F, and had "started to question whether this was just the first of a series of obstacles she would come up against in her life due to her disability".
Medical evidence presented to the tribunal revealed Dean had undergone a psychiatric assessment to support an application for disability support funding several months before starting work at A&F last May. The psychiatrist described her as "socially isolated", with an anxiety disorder that reached "phobic levels" relating to a fear of travelling on public transport.

Abercrombie is making a calculated bet

Assuming COGS as a proxy for inventory moved in a quarter, we find that abercrombie and fitch typically purchases ~$300 million in inventory per quarter which would imply that the company held almost two quarters’ worth of inventory at last check. In all likeliness, this backlog is mostly fall and winter clothing. Sooner or later, the company will have to clear this inventory, probably before summer. Knowing how quickly fashions can change, I wouldn’t imagine that it would be easy to move this build up without eventually succumbing to the so-called “promotional pied piper.”

hollister clothing is making a calculated bet in maintaining prices despite the fact that competitors have been slashing prices across the board. My assumption is that it hopes that by bucking the trend it can accomplish the following:
1. Maintain its “casual luxury” image by not chasing its demographic down market.
2. Magnify its brand appeal through its relatively “aspirational” pricing. The company hopes that empty-handed teenagers will be walking out of the store thinking, “Someday when I have the money, I’ll buy tons of Abercrombie!”
3. Capitalize on consumer surprise when competitor prices jump back up to pre-recession levels and Abercrombie’s “miraculously” stay flat.
The problem, however, is that for this strategy to work Abercrombie must prove to have a truly defensible luxury product. My contention would be that teen apparel is very substitutable. It is, after all, difficult to establish “aspirational” status for ripped jeans and double entendre t-shirts. In trading down or going to other similarly, “aspirational” teen retailers such as Urban Outfitters (URBN), which are running sales, customers may find that that they don’t necessarily need to return to hollister.
In addition to long-term risk to the Company’s demographic appeal, the decision to maintain prices in the face of lower revenues has put some stress on Abercombie’s balance sheet that will have to be dealt with. A quick look at Abercrombie’s inventory and cost of goods sold finds that the company held $505 million in inventory at the end of last quarter, up from a typical $400 million-ish that are typically held through the last two quarters of the year.