US apparel retailer Abercrombie & Fitch suffered a 51-per-cent fall in sales in Asia Pacific in its first quarter as Covid-19 forced store closures across the region.
Worldwide, the company suffered a 34-per-cent decline, but at least one analyst is impressed that the company’s sales did not fall further.
“The group was one of the first to close its physical stores as this crisis broke and it is very heavily exposed to discretionary apparel categories that took a battering during the depths of the pandemic,” said GlobalData Retail MD Neil Saunders.
“Compared to rivals, A&F has performed relatively well.”
The loss of sales in physical stores was compensated for in part by a 25-per-cent rise online.
“Over the period, A&F did a good job with digital marketing and kept customers regularly informed of various offers and deals,” said Saunders. “This both helped to keep the brand on the radar and stimulated some buying activity in a market that would otherwise have been very subdued.”
In terms of sales across all channels, the company’s namesake brand performed the best, declining 30 per cent worldwide. Sales at the surfwear concept Hollister declined by 36 per cent. By geography, sales fell 31 per cent in the Americas and by 35 per cent in Europe, Middle East and Africa (EMEA).
The soft sales saw the company record an operating loss of US$209 million and a net loss of $244 million.
As at the end of May, Abercrombie & Fitch has reopened about half of its global store network in the wake of the Covid-19 crisis. Sales at those stores are running at about 80 per cent of the levels of one year ago in North America, and 60 per cent in EMEA.
“This is not a bad initial come-back figure, especially as our data shows that where reopening has occurred, customer traffic and spend is gradually building which indicates the numbers will strengthen as time progresses,” says Saunders.
“Nevertheless, the numbers show that trade is not coming back with a bang and given A&F is in a relatively good position in terms of brand and product mix, productivity levels will be significantly worse in other parts of the apparel market.”