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Abercrombie & Fitch to close Gilly Hicks stores

Abercrombie & Fitch’s lingerie, beach and nightwear brand fascia Gilly Hicks is to close.

The US retail group will close all its standalone Gilly Hicks stores, including five in the UK, however the Gilly Hick’s lingerie line will still be available in Hollister stores and online.

The retailer has UK stores in Westfield London, Regent Street, Westfield Stratford, St David’s in Cardiff and Bluewater.

Mike Jeffries, chief executive officer and chairman of Abercrombie & Fitch Co, said: “In connection with our long-term strategic review, we have decided to focus the future development of the Gilly Hicks brand through Hollister stores and direct-to-consumer channels.

“This decision reflects the successful pilot of selling Gilly Hicks branded intimates in Hollister stores. As a result, we have made the determination to close our standalone Gilly Hicks stores. We believe it is critical to focus our efforts and resources where we have the greatest opportunities to drive profitable growth for our brands.”

The American retail group reported a 12% drop in revenues to $1.03bn (£640m) in the 13 weeks to November 2. Like-for-like sales for the quarter fell 14%.

For its third quarter the company expects to suffer pre-tax charges of between $90m (£55.9m) to $100m (£62.2m) relating to its restructuring plans for Gilly Hicks.

Jeffries said: “Our results for the third quarter reflect continued top-line challenges, with overall spending among younger consumers remaining weak. Until we have seen a clear trend improvement, we are continuing to take a cautious approach into the fourth quarter and are working to end the year with appropriate levels of fall carryover inventory.”

However he added the company now has “a clear roadmap for sustainable growth in sales, profitability and return on invested capital” after completing a long term strategic review.

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