This Iconic Clothing Chain Is Closing Its Biggest Stores
This stylish store was the king of the '90s and '00s, and now it's closing down its flagship locations.
It'd be an understatement to say 2020 has been a tumultuous time for the economy at large, and for the world of retail specifically. It feels like every single day, a store we used to love is closing its doors. Sadly, the bloodbath continued this week with the news that one of America's most recognized global brands is closing its biggest stores worldwide. Columbus Business First reports that Abercrombie & Fitch is shutting down its four biggest flagship stores by the end of Jan. 2021, though the closures were planned before COVID hit. Read on to see what's ahead for this beloved store, and for another shopping update that's crushing, check out This Fashion Chain Is in Danger of "Imminent Collapse."
The four stores shutting down in a matter of weeks are in Dusseldorf, Germany; London, England; Munich, Germany; and Paris, France. Three other key stores—in Brussels, Belgium; Madrid, Spain; and Fukuoka, Japan—will also close when their respective leases expire early in the new year. The closures are part of Abercrombie & Fitch's previously announced global strategy, introduced in 2018, a representative for the company told Best Life—and are not in response to the current economy or the coronavirus pandemic.
Based in New Albany, Ohio, Abercrombie & Fitch's smart, preppy clothing has proven popular worldwide, even after falling from its height in the late '90s and early '00s. But the cost of maintaining these physical premises has proven a drag on the company. The stores earmarked for this round of closures combine some 200,000 square feet of space—or 10 percent of Abercrombie & Fitch's overall brick-and-mortar footprint. Cutting them will bring the company a gain of $8 million this quarter, according to Columbus Business Journal.
The move leaves the company with eight similarly-sized flagship stores around the world, and 850 smaller spaces. The company is moving away from high-footfall tourist areas towards those with more local shoppers, who can engage with the brand in-store and also online. "Repositioning in markets is something we have talked about consistently, as we were negotiating with landlords and … continuing to reposition and stay in the markets and be closer to the customer," CEO Fran Horowitz said in a statement to Columbus Business Journal.
This week, Abercrombie & Fitch reported a 5 percent sales decline to $819.6 million in its third quarter for the fiscal year, which ended on Oct. 31. However, digital sales jumped 43 percent to $382 million, suggesting more of the brand may move online in the coming years.
"All of these stores will be examined," Horowitz said. "Our stores in North America are fully omnichannel, and we're rolling that out across the world."
Read on for other clothing stores that are hurting, and for more current retail news, check out why This Legendary Store Just Announced It's Filing for Bankruptcy.
Another beloved '90s store that's fallen victim to the many retail closures and restructurings amid the pandemic is Banana Republic. Its parent company, Gap Inc., recently revealed that it will be closing most of its mall locations in the next few years, and that includes shutting down 130 Banana Republic stores in North America by 2023. The brand only accounted for 15 percent of the company's net sales in the latest fiscal year, Mark Breitbard, the president of Gap Global, said during a virtual meeting with investors in October.
"We're shrinking North American specialty stores and getting out of mall-based locations," Breitbard said on the call. "What we're doing is restructuring the fleet, shifting and pushing more of the business to digital and growing (market) share in key categories." And for another favorite that isn't surviving the pandemic, check out This Long-Standing Brand Is Closing All But 2 of Its U.S. Stores.
H&M announced in early October that, over the course of the next year, the company will be shuttering 250 stores of its 5,000 global locations. The company admitted that the decision was related to the retail slowdown and the shift to online shopping as a result of COVID. "More and more customers started shopping online during the pandemic," the company explained.
"Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger," Helena Helmersson, H&M's CEO, said in a statement. And for another iconic store that met its demise recently, check out This Beloved Department Store Just Announced It's Closing All Locations.
After seeing sales drop nearly 30 percent, Francesca's announced in mid-November that it would be closing 140 of its 560 brick-and-mortar stores. While that leaves many of Francesca's locations open, the company said in a statement that bankruptcy protection is on the table if those sales numbers don't improve. And for more retail news delivered straight to your inbox, sign up for our daily newsletter.
In November, tween store Justice announced that all of its stores would be closing after its parent company, Ascena Retail Group, Inc., sold the brand off for $90 million. While Ascena announced plans for the brand to shift to an online model earlier this year, the chain's remaining stores will now close by early 2021 as a result of the sale to Bluestar Alliance.
However, there is hope for Justice yet, according to Bluestar's CEO, Joseph Gabbay. "Justice is an important asset with years of growth ahead," Gabbay said in a statement. "An icon of tween culture, with its influence felt across fashion, lifestyle, pop culture and more, we see opportunity for global brand extensions and partnerships." And for more urgent retail news you need to know, check out This Popular Clothing Brand Is Closing 100 Stores.