Abercrombie & Fitch’s chief executive said the clothing brand was coping with industry turmoil during the pandemic thanks in part to demand for hoodies and other comfortable gear that consumers are wearing around the house.
“Casual clothes are in our DNA,” Fran Horowitz told the Financial Times on Thursday. “We did pivot into some more cosy, casual clothing as a percentage of our business.”
The company shifted its buying to reflect the changed demand from consumers working and taking school classes from home. “But we’re still selling denim and dresses,” she added.
Demand for joggers, fleeces and sweatshirts, as well as sleepwear under Hollister’s Gilly Hicks brand that Abercrombie & Fitch also owns, helped the company eke out net income of $5.8m in the 13 weeks ended August 1.
While net sales dropped 17 per cent from a year ago to $698m, the results were better than expected and sent shares in Abercrombie & Fitch up 10 per cent in late-morning trading in New York.
Ms Horowitz said a younger customer base had helped Abercrombie & Fitch. “We are pleased to be a young retailer at the moment . . . Whether they’re going out or on their Zoom call, there’s still a need to dress up and feel good. The kids that are going back to school — even virtually — still need a first day of school outfits.”
Digital sales rose 56 per cent in the quarter to $386m while restrictions on movement hit Abercrombie & Fitch’s bricks and mortar sales. About 14 per cent of the group’s 639 US stores remain closed, although all of its 210 outlets overseas are open.
Lower costs supported the bottom line at the company, which has furloughed employees and suspended some rent payments during the crisis.
Stores and distribution expenses fell 18 per cent in the quarter while marketing, general and administrative costs declined 16 per cent.
With consumers spending more time at home and away from the office, formal clothing has been especially hard hit during the pandemic. In recent weeks, chains including Brooks Brothers and Ann Taylor-owner Ascena Retail have filed for bankruptcy.
Scott Lipesky, Abercrombie & Fitch’s chief financial officer, said it was hard to say if it was selling more to older customers, although he added: “We hope everybody out there wants to wear an Abercrombie hoodie.”