Abercrombie loss widens as sales fall 14%; expects sales to improve
New Albany, Ohio – Abercrombie & Fitch Co. posted a wider-than-expected loss and drop in revenue for its first quarter. But the teen apparel retailer, which is in the middle of a brand update to improve its controversial image, sounded a positive note, noting that its comparable sales continued to improve in May and that it expects sales to continue to improve in the second half.
“We knew the first quarter was going to be difficult due to a number of factors, both internal and external and, most significantly, because many of the actions we are taking to improve our business are in the early stages of implementation and have not yet been fully realized,” stated Arthur Martinez, executive chairman. “While our turnaround won`t be accomplished overnight, we believe the changes we are making will reinvigorate our iconic brands and lead to meaningful and lasting improvement."
Abercromie’s net loss for the quarter increased to $63.2 million from $23.7 million. Lease termination and store closure costs, as well as asset depreciation, contributed to the growth in net loss.
Net sales decreased 14% to $709.4 million, driven by a 8% decline in same-store sales and an adverse effect from changes in foreign currency exchange rates. By brand, same-store sales fell 9% for Abercrombie & Fitch and 6% for Hollister.
Abercrombie anticipates closing approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.
In addition, the retailer plans to open 17 full-price stores in fiscal 2015 in the key growth markets of China, Japan and the Middle East, and five full-price stores in North America. The company also expects to open nine new outlet stores in the U.S.
Looking ahead, Abercrombie plans to invest in omnichannel capabilities. The retailer has also focused the entire organization on putting the customer at the center of everything it does, particularly with regard to store experience and our merchandise assortment.
“During the quarter, the company continued to take major strides to revitalize its brands, enhance performance, and position itself for a return to profitable growth,” said Martinez. “This includes significant changes across our business, including augmenting our leadership team, enhancing organizational structure and efficiency, addressing core merchandise and design processes, and optimizing our store fleet by adding stores in high potential markets while closing under-performing stores.”
Vasos named CEO at Dollar General
Dollar General elevated COO Todd Vasos to the role of CEO, filling a position held by Rick Dreiling who is sticking to his original retirement timetable after losing out to Dollar Tree in the bidding for Family Dollar.
Dreiling had previously announced plans to retire, but then modified those plans after Dollar General entered the bidding to acquire Family Dollar. Had Dollar General prevailed, Dreiling planned to stick around to oversee the integration. However, Dollar Tree won out which enabled Dollar General and Dreiling to maintain the company’s original succession strategy.
“On behalf of the entire board of directors, we are excited to have Todd Vasos as our CEO and look forward to working with him in his new role. Todd is a proven leader and the right person to guide Dollar General as it enters this next chapter in the Company’s history,” said Dollar General’s lead director Mike Calbert. “With Todd’s appointment as CEO and Rick’s continued service, we ensure the continuation of both the leadership and strategy that have made Dollar General a retail powerhouse.”
The change takes effect June 3 and will see Vasos join the board with Dreiling remaining on the board until January 29, 2016. “I am excited and honored to have the privilege to lead Dollar General. I am grateful to Rick for his guidance as a mentor and friend,” Vasos said. “Under Rick’s leadership, we have delivered exceptional results. My commitment is to build on that success. I believe Dollar General has an exciting future ahead and look forward to continuing to work with our talented employees to provide our customers with the everyday low prices that they count on from Dollar General.”
Vasos joined Dollar General in December 2008 as executive vice president, division president and chief merchandising officer. He was named COO in November 2013. Prior to joining Dollar General, Vasos served in executive positions with Longs Drug Stores Corporation for seven years holding roles such as COO and chief merchandising officer. Vasos also held leadership positions at now defunct chain drug retailers such as Phar-Mor Food and Drug Inc. and Eckerd Corporation.
“The board and I are confident that Todd is the right leader for the future growth of Dollar General. Todd is a highly accomplished retail executive with whom I have had the pleasure of working for nine of the last 12 years, including more than six years at Dollar General. I look forward to supporting him in his new role to ensure a smooth and seamless transition,” said Dreiling.
Dollar General currently operates 12,000 stores in 43 states.
Walmart funds path to success in Florida
The Walmart Foundation is investing in job training efforts in Florida by giving more than $1 million in grants to 21 nonprofits across the state.
"Through these grants, more than 20 deserving nonprofit organizations will be able to continue funding vital local programs across the state,” said Senate President Andy Gardiner. “Thanks to Walmart and the Walmart Foundation for recognizing the impact these programs have on so many lives. We appreciate their continued investment in communities throughout Florida."
The Walmart Foundation’s State Giving Program supports organizations that create opportunities so people can live better. The program strives to award grants that have a long-lasting, positive impact on communities across the U.S. Over the last fiscal year, Walmart and the Walmart Foundation gave more than $82 million in cash and in-kind contributions to charitable organizations throughout Florida.
“Walmart and the Walmart Foundation are uniquely positioned to make a significant, positive impact in the communities we serve across the state,” said Jim Lewis, Walmart regional general manager for North Florida. “The organizations being recognized by Walmart this cycle work tirelessly to provide relief, and we are honored to be supporting their efforts to help residents most in need.”
In 2014, Walmart delivered a year early on a 2010 commitment to contribute $2 billion to fight hunger. As part of that commitment, Walmart and the Walmart Foundation donated 1.1 billion meals to those in need, and helped Feeding America grow its capacity to rescue and distribute more perishable food across the U.S. in a sustainable, cost-effective way.
In Florida, Walmart donated more than 43 million pounds of food to local food banks — nearly 36 million meals in the last fiscal year. Walmart representatives alongside state and local officials kicked off the statewide giving tour by awarding $225,000 to nonprofits in the Central Florida area.
Nonprofit recipients included:
• Boys & Girls Clubs of Lake & Sumter Counties, Inc., Leesburg: BGCLSC received a $45,000 grant for its Healthy Snacks and Meals for Healthy Kids program.
• Catholic Charities of Central Florida Inc., Orlando: Catholic Charities received a $75,000 grant for the Agape Food Bank’s SmilePak program.
• Coalition for the Homeless of Central Florida, Orlando: The Coalition received a $50,000 grant for its Meal Service Program.
• Promise Inc., West Melbourne: Promise received a $25,000 grant for its Hydroponic Garden Vocational Training & Employment Program.
• The Society of Saint Andrew Inc., Orlando: The Society received a $30,000 grant for its Florida Gleaning Network program.