Abercrombie is closing 60 stores this year

  • Abercrombie & Fitch reported strong sales growth in the fourth quarter of 2017.
  • This growth was driven by greater investment in stores, marketing, and omnichannel experiences. 
  • The company confirmed it would be closing up to 60 of its Abercrombie & Fitch and Hollister stores in 2018.

Abercrombie & Fitch is bouncing back by cutting stores. 

The teen retailer has struggled in recent years. In 2016, the company's operating income plummeted to $15.2 million — down from $72.8 million in 2015 — and closed 54 stores.

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On Wednesday, the company was praised by analysts after it announced positive same-store sales growth in its fourth-quarter results. Same-store sales were up 9% overall at the company, boosted by 11% growth at Hollister and 5% at the Abercrombie brand itself. 

However, the company also announced it would be closing up to 60 Abercrombie and Hollister stores in 2018.

The company has made a significant investment in its stores over the past year. In 2017, it created seven new Abercrombie prototype stores, downsized 16 of its stores, and closed 39.

On a call with investors on Wednesday morning, CFO Joanne Crevoiserat said that growth in the quarter was driven by strong direct-to-consumer sales and better traffic in stores.

"The physical store still serves an important role for a customer journey from a brand experience," Crevoiserat said.

The company has closed more than 400 stores since 2010, and 60% of its leases are expiring over the next 10 years, Crevoiserat said.

The company has not yet confirmed which stores would be closing. 

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SEE ALSO: Abercrombie just showed how serious it is about fixing its biggest flaw

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