(Filed Under wholesale Lingerie News). Lingerie retailer Gilly Hicks is in the midst of a semi-annual sale with discounts up to 60% off, while parent Abercrombie & Fitch Co. continues shutting down all of that brand’s physical stores which once numbered 28 worldwide. Meanwhile Abercrombie itself, which includes the Hollister brand, reported company-wide sales decreases for the nine weeks ended January 4.
According to Abercrombie, “Total comparable sales for the nine weeks ended January 4, 2014, including direct-to-consumer sales, decreased 6% with comparable U.S. sales decreasing 4% and comparable international sales decreasing 10%.” The declines are based on a similar nine week period from a year ago.
The firm is in the midst of a “profit improvement initiative” which includes the closing of all the Gilly Hicks stores by the end of its fiscal first quarter 2014 as well as other store closings and “cost reduction efforts.” Abercrombie, however, continues to maintain it is not killing its lingerie brand, noting that Gilly Hicks will “continue to be sold via Hollister Co. stores and through the Gilly Hicks website.”
The current on-line lingerie sale offers bras from $9.99 and panties from $2.99 on “select styles.”
While announcing the recent Abercrombie sales declines, Mike Jeffries, CEO and chairman declared “Given the challenging and promotional retail environment, we are pleased that our quarter-to-date performance has exceeded expectations. Our direct-to-consumer business was particularly strong, reaching a record level of approximately 25% of total sales in December, and we also saw sequential improvement in comparable store sales. In addition, fall season carryover inventory levels are well controlled as we move into the new season. We continue to focus on execution against our long-term strategic plans, which we believe will drive meaningful improvements in our business in 2014 and beyond.”
While warning that a host of charges including the store closures will negatively impact its net earnings, Abercrombie reported that “Based on higher than expected sales for the fourth quarter-to-date and ongoing cost reduction efforts, the company now expects full year adjusted non-GAAP (generally accepted accounting principles) earnings per diluted share to be in the range of $1.55 to $1.65, compared to prior guidance of $1.40 to $1.50.”
As of mid-January Abercrombie reported it “operates 890 stores in the United States and 166 stores across Canada, Europe, Asia and Australia.”
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