Abercrombie & Fitch, the teen-oriented clothing store that you haven’t visited since age 17 because the music is too darn loud, let the world know that it was for sale a few weeks ago. It shouldn’t surprise anyone that a prominent private equity firm is interested, but that firm, Cerberus Capital Management, is teaming up with competitor American Eagle.
In recent years, Abercrombie has been working to increase its cool quotient with current teens, making moves like getting rid of its longtime CEO, Mike “No Fatties” Jeffries, relaxing its required hotness levels for employees, and having its models put their shirts back on. Yet its sales continue to fall, and the company only needs to look down the mall to see its possible future.
There are bankrupt and empty Wet Seal and American Apparel stores, and its competitor Aeropostale re-opened under new management after its own Chapter 11 filing.
American Eagle, though, is doing well, especially its Aerie lingerie brand. While its most recent quarter showed weak sales, the company is worth twice as much as Abercrombie & Fitch while it only has about 100 more stores.
“People familiar with the matter” tell the Wall Street Journal that other private equity firms and another staple mall clothing store, Express, are working on their own bids.
However, a similar retailer that’s thriving may help make Cerberus’s bid more compelling, and the two retailers with similar products may be a good match.
by Laura Northrup via Consumerist
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