News

Engaged Capital suggests new direction for Abercrombie

BY Dan Berthiaume

Newport Beach, Calif. — Engaged Capital, an investment firm specializing in small and mid-cap North American equities and beneficial owner of approximately 400,000 shares of the common stock of Abercrombie & Fitch Co. sent a letter to the company’s board of directors on Dec. 3. In its letter, Engaged Capital highlighted the upcoming expiration of Abercrombie chairman and CEO Michael Jeffries’ employment contract on February 1, 2014 as an opportunity for the board to set a new direction for the company.

Engaged Capital also expressed its concern that no qualified successor appeared to exist at Abercrombie, and noted that continuing on the present course under the leadership of Jeffries would further cement the loss of shareholder confidence in the board.

“Investors in Abercrombie have endured poor performance due to poor leadership for far too long,” said Glenn W. Welling, principal and chief investment officer of Engaged Capital. “The board needs to come to the same conclusion that everyone else already has – it is time for new leadership at ANF. The renewal of Mr. Jeffries’ employment contract would be a direct contradiction to what shareholders want and the company needs. ANF’s future success will be dependent on the company’s ability to adapt to a fast changing retail environment, carefully manage expenses, and efficiently allocate capital. We urge the board to immediately commence a CEO search for candidates with relevant retail apparel and turnaround experience or consider a sale of the company.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...
News

Survey: Americans prefer in-store gift purchases

BY Dan Berthiaume

Matthews, N.C. – Americans prefer to make most gift purchases in stores close to home. Seven-in-10 consumers in a recent survey conducted for Family Dollar say they describe themselves as in-person shoppers, while only 30% say they would be best characterized as online shoppers.

Also, more than half of surveyed consumers say they expect to travel 10 miles or less when looking for the majority of their gifts this season. During the holiday season, 93% of consumers consider spending time at home to be more important than traveling, which is favored by 59% of consumers. More than three-in-five consumers shop for stocking stuffers, and those shoppers find these five factors to be the most important in making their stocking stuffer selections: deals or specials offered; candy selection; coupons available; small electronics; and gift cards selection. Nearly half of consumers start holiday shopping after Thanksgiving.

"The National Retail Federation reported that Americans took advantage of early holiday sales but spent less than last year, indicating that economic conditions still impact consumers’ ability to spend," said Jocelyn Wong, senior VP and CMO, Family Dollar.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...
News

E-commerce drives comp growth at Ascena

BY CSA STAFF

Ascena Retail Group, parent company of Lane Bryant, Dressbarn and Justice, may have just reported same store sales growth across all its formats and achieved Thanksgiving weekend sales objectives, but president and CEO David Jaffe remains cautious in his outlook for the remainder of the holiday season.

As so many other retailers have noted in recent weeks, Jaffe said this year’s highly competitive, promotional and compressed holiday season makes it difficult to know how the next few weeks will play out, despite the company’s recent performance.

“We were pleased that our top line momentum continued into the first quarter, with all of our brands generating positive total comps,” Jaffe said when the company released results for its first quarter ended October 26. “We also continued to make progress on our strategic priorities during the quarter, including our synergy initiatives, which will position the business for long term growth. We expect the retail environment to be challenging for the foreseeable future, with a highly promotional holiday season. We have taken a conservative approach to planning inventory, and have developed promotional contingencies to ensure we end the season clean.”

The operator of 3,900 stores under the Lane Bryant, Cacique, Maurices, Dressbarn, Catherines, Justice and Brothers banners said its first quarter sales increased 5% to nearly $1.2 billion and same store sales across all formats increased to an aggregate total of 2%. Throw in a 27% comp increase for e-commerce operations which now account for 9% of total company sales and the consolidated comp increase was 4%.

Profits on an adjusted basis fell slightly to 36 cents a share from 39 cents a share due to increase expenses associated with growth and infrastructure investments, according to the company.

Ascena’s sales performance wasn’t enough to alter the company’s performance expectations during the holiday season or its outlook for the full fiscal year ending in July. Total comps are expected to rise in the low single digits and there will be a nominal increase in square footage as expected store openings in the range of 180 to 190 units are offset by the closing of 130 to 140 stores.

As Jaffe noted in response to a question during the company’s conference call, he feels good about the company’s on plan performance over the weekend, but it was just one weekend.

“We still have three weeks to go, and the numbers are pretty big for the next three weeks. So while [Thanksgiving weekend] is certainly the kickoff to the holiday shopping season, time has taught us over and over again that it’s not necessarily a harbinger of what we’re going to see for the next three weeks,” Jaffe said. “So we’re cautiously optimistic about the rest of the season.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Are you hiring seasonal employees this year?

View Results

Loading ... Loading ...