Abercrombie is putting itself up for sale
Abercrombie & Fitch shares soared 14% to $14.50 ahead of Wednesday's opening bell after a Reuters report said the teen retailer hired an investment bank to assess takeover interest.
Any potential suitor should be able to get a favorable price for the company, at least compared to a year ago. Abercrombie has plunged 61% since reaching a 16-month high in March 2016.
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The decision comes at a time when US retailers are closing stores and filing for bankruptcy at rates not seen since the financial crisis. As online sellers continue to take a bite out of their brick-and-mortar counterparts, companies like Abercrombie are scrambling to stay afloat.
The company announced back in early March that it was closing 60 US stores, bringing its total number down to about 674, a 20% drop since 2013. The decision came after a dismal fourth quarter in which same-store sales at its namesake brand declined 13%. Its next quarterly earnings report is scheduled for May 25.
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Abercrombie has been trying to win back customers by revamping its brand and redesigning its stores to be brighter and less nightclubby. In another major shift, the retailer stopped printing logos on everything in response to teens' shifting preferences for clothing without any identifiers.
Sears, Macy's, JCPenney, and more than a dozen other national retailers have also announced mass closures this year. The total now stands at more than 3,200 stores so far this year.
Abercrombie has hired investment bank Perella Weinberg Partners to handle any potential deal, although there is no certainty that one will occur, according to the Reuters report.
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