New Albany, Ohio Abercrombie & Fitch Co.’s cost-cutting efforts failed to offset a net loss of $26.8 million for the first quarter that ended May, 2, compared with a profit of $62.1 million a year ago.
Shopper thrift contributed to a steep 24% drop in sales, the company said, which totaled $612.1 million. Same-store sales tumbled 26%.
The company is currently reviewing its Ruehl operation. While the result is still unknown, the retailer reported that it expects to record a non-cash impairment charge of up to $55 million for the quarter.
While shopper traffic may be sluggish, Abercrombie & Fitch remains on track to open four flagship stores in fiscal 2009 including Hollister Co. in Soho, Abercrombie & Fitch and abercrombie in Milan, and Abercrombie & Fitch in Tokyo.
The retailer also said it has acquired a new lease for the abercrombie 5th Avenue flagship store in New York City. This new space, which is adjacent to the previous one, offers more store frontage and has favorable lease terms. The store is expected to open in 2010.