Abercrombie's Biggest Initiative Of The Past Five Years Is Failing

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After U.S. teens stopped lining up to buy its signature cologne and $40 tank tops, Abercrombie looked overseas for help. 

But today Abercrombie forecasted that it would lose money in the first quarter, in part because sales are down internationally. 

That means that Abercrombie’s biggest initiative of the past five years is failing. 

“Sales were down a whopping 14 per cent internationally, suggesting that assortments aren’t tailored enough or the store experience is uninviting,” Brian Sozzi, chief equities analyst at NBG productions, told us. 

Consumers in Europe and Asia are often seen waiting in line to buy Abercrombie clothes at its New York flagship. While American teens got fed up with wearing logos a long time ago, they’re hotter than ever in Europe. 

Abercrombie has already done major backpedaling in its international expansion, according to a note from Sterne Agee analysts Margaret Whitfield and Tom Nikic.

Following consistently bad sales numbers (international is down 26 per cent from last year), Abercrombie slowed growth rate overseas and “postponed” the much-publicized openings of flagship stores. 

This was bad news because international markets were considered Abercrombie’s only hope for growth. 

Perhaps Abercrombie could learn a thing or two from Gap. Both retailers once reigned the world of the young and hip, and both looked to expand internationally when things stopped going great in the U.S. 

But Gap CEO Glenn Murphy learned the hard way that location doesn’t mean success. With his domestic and international businesses flailing, Murphy decided to bring in top-notch designers to reinvent Gap’s product. 

With the right product, sales at the retailer soared, and Gap is now considered a retail success story. Maybe Abercrombie’s clothes and store experience, and not its market presence, led to the current predicament. 

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