US retail group Abercrombie & Fitch is looking at ways to streamline the business and lower costs after posting a drop in like-for-like sales over the festive period.
In the 14 weeks to February 2 like-for-like sales slumped by 1%. The group also expects a decline for the current quarter.
Like-for-likes at the eponymous chain were flat, while sales at young fashion retailer Hollister dropped by 2%. Online was the only area of growth for the group, up 26.8% on the previous year.
Overall sales rose by 10.5% to $1.47bn (£971m), boosted by an extra week compared the period in the previous year.
Lower cotton prices helped boost Abercrombie’s overall profit, although chief executive Mike Jeffries revealed plans to boost this internally, creating an in-house team to work alongside a consultancy in order to lower expenses and lift operating margins.
“Our profitability is not where it needs to be,” he added.
“We’ve made progress in our operating margins over the past couple of years, but they are still well below historical levels and that is despite the benefit of our highly profitable international business. This initiative is a major corporate priority.”
The company has also carried out a global market study to better understand how shoppers view the retailer.
The latest results were announced on Friday (February 22), which then led to shares slumping nearly 8%. According to the Wall Street Journal Abercrombie & Fitch Co.’s shares have fallen by about 50% since their peak of $85 in October 2007.