Recently, there's a new trend going on in Wall Street that involved breaking up old specialty apparel brands that are past their time in order to "unlock" what is considered as their true shareholder value.
So, which are the brands that will seemingly join the fray? Well, definitely not Abercrombie & Fitch, because number one, it's not an old specialty apparel brand, and number two, because CEO Fran Horowitz recently told Yahoo! Finance in an interview that per now, she has no intention of breaking up Abercrombie & Fitch. According to her, she still sees a lot of strong value in the brand's portfolio, and it has not yet run its course.
Of course, mid-2017 saw the famed A&F brand put itself on the sales block, surprising people. That surprise is to be short-lived however, as the stopped going that path by June of the same year. Coincidentally, Horowitz also owns the resurgent Hollister brand.
One brand carries the other
For the past two years or so, Hollister has been sharpening its prices and steadily improving its apparel style for the young and fickle adult crowd, carrying Abercrombie & Fitch while also outperforming it.
Abercrombie on the other hand, has struggled to drive consistent gains in their sales, all while stabilizing itself from the disastrous final days of former long-time CEO Mike Jeffries. And take note of the fact that this happened while the brand is in the middle of improving customer experience and and product quality.
In fact, Same-store sales for Abercrombie & Fitch was only able to rise by about 1% in 2018, while Hollister weighed in with an impressive 5% same-store sales gain for that year alone.
It was also late last year when Horowitz officially joined the company's management team, while also promoting former Hollister President Kristin Scott to oversee both brands. Per Horrowitz, Scott's influence on the Abercrombie & Fitch brand's product assortments will start to show up shortly in stores. His influence on the brand will also be more prominent later this year.
Of course, Abercrombie & Fitch's value could easily have been affected by the rigid market. However, the CEO's decision to manage both companies under one roof has proven to be quite effective for the parties involved, as the shares of Abercrombie & Fitch managed to skyrocket by up to 191% since July 2017, when it ended its reported sale discussions.
Other retail companies in the field however, weren't so lucky.
