Abercrombie & Fitch is in trouble.
The teen retailer is working with an investment bank to find a buyer, according to a Reuters report published on Wednesday.
The company’s operating income plummeted to $US15.2 million in 2016, down from $US72.8 million in 2015, and it is closing dozens of stores in the midst of an effort to revamp its brand.
Abercrombie has struggled to keep up with teen trends in recent years. The company has attempted to modernise with changes such as redesigning stores, ditching its logo-heavy styles, and dropping its super-sexualized advertising.
However, scrolling through Abercrombie’s website reveals that the retailer still has some major problems.
Discounts are normal in retail. But, no brand wants almost every item to be 40% to 60% off. This isn't even the site's sale section.
Abercrombie was promoting a $29 dress sale. But it's not just dresses you'll see steep discounts on.
Major discounts usually mean that retailers are having a hard time clearing inventory. In other words, they ordered too much of one style, and people aren't buying it.
Some of the steepest discounts are on items that represent Abercrombie's attempt to tap into recent trends.
Comparing Abercrombie's 'trendy' looks with similar items from other retailers reveals exactly how Abercrombie is falling short.
Take jumpsuits. Zara, a fast-fashion retailer known for nailing its fresh off-the-runway looks, is selling a wider variety of styles at less expensive prices than Abercrombie.
And, if customers are looking for even bigger deals, they can just go to Forever 21, which is selling jumpsuits for as low as $12.
Fast-fashion retailers like Zara, H&M, and Forever 21 can beat Abercrombie when it comes to both trends and prices.
Abercrombie has tried to boost sales by entering the athleisure market -- but it doesn't look like customers are biting.
While Abercrombie has tried to ditch its signature look of slapping its logo on every piece of clothing, the retailer still has an entire section called 'A&F Logo Shop.'
Now, the retailer is stuck trying to compete with fast-fashion chains that have built their businessed on quickly adapting to trends at low prices -- something Abercrombie is still figuring out how to do best.
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