Why does Abercrombie & Fitch want to close at least three flagship stores this year? What else do they have planned?
Abercrombie & Fitch operates more than 850 stores under its brands across North America, Europe, Asia and the Middle East.
They are significantly paring their brick-and-mortar footprint and are ready to walk away from leases at U.S. malls because their customer base increasingly shops online. They plan to close at least three of the 15 flagship stores.
The company, the owner of Abercrombie & Fitch, Hollister, Abercrombie Kids and the Gilly Hicks lingerie brands, is beefing up its e-commerce arm that now commands 30% of all sales.
It sees its so-called omnichannel shoppers, or those who shop online and in stores, as the “most important customer” today.
“For us, it’s about getting the right store in the right location at the right size,” he said.
Abercrombie & Fitch operates mall stores on fairly flexible leases, giving it the ability to renegotiate 50% of its leases every two years.
“We’re in the midst of our landlord negotiations” that also include the normal expiration of leases, he said. “That gives us a good place to be as we’re sitting at the tables with our landlords, because we have a lot of malls that they want us to be in and they have a lot of malls that we want to be in.”
Lipesky expects to pare from 30% to 50% of square footage from many Abercrombie & Fitch stores.
The company is looking to rid itself of flagship stores that were built in high-tourist locations, where locations tend to have long lease lives and expensive buildouts.
The company plans to end 2020 with 12 flagships, but Lipesky didn’t name which ones are targeted to shut.
They have closed 500 stores in the past decade and also opened over 300 new experiences; 85 just in 2019. “New experiences” refers to brand-new stores as well as remodeled stores.