Sep 13, 2019 | By Athena Chen
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Troubled US retail giant Abercrombie & Fitch Co is working with an investment bank to gather takeover interest from other retailers, people familiar with the situation told Reuters on Tuesday.
Abercrombie has hired investment bank Perella Weinberg Partners to handle the takeover approaches, two sources said, asking not to be identified. There is no certainty that any deal will occur, the sources added.
Abercrombie and Perella Weinberg declined to comment.
Abercrombie’s shares are trading at a 17-year low, closing flat at $12.67 Wednesday, making it a vulnerable acquisition target. The retailer is continuing on a course to turn the business around, appealing to a slightly older demographic that was formerly draw to the logo-ed casualwear of its heyday.
Operating income has fallen from $72.8m in 2015 to $15.2m last year, as faster-fashion competitors and growth in the pureplay online sector weighed on its profitability.
Abercrombie, with a market capitalisation of $862m, operates around 700 US stores and 190 international units. The retailer has been seeking to cut costs and downsize its retail footprint, announcing earlier this year that it would let the leases of around 60 US stores expire.
Abercrombie has also been pinning much of its turnaround hopes on its surfwear-inspired brand Hollister. While the company’s overall sales are down, the Hollister brand has recorded two years of flat same-store sales performance.
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