Abercrombie & Fitch stores across America are disappearing
But the retailer still has to battle seismic changes in mall shopping and teen spending.
Abercrombie recently reported that it plans to shutter another 60 stores this year, Sapna Maheshwari of Buzzfeed says, citing this morning's earnings call.The company has already closed about one-third of its stores in the past six years.
Chairman Arthur Martinez knows that the current retail climate is making it hard to execute a turnaround, pointing how consumers are putting less of their spending money towards apparel, the aforementioned ailing mall industry, and mounting competition.
"Competition continues to be intense. The traditional so-called teen retailers, Abercrombie, Eagle, and Aeropostale have of course been joined in that young customer space by people like Zara and H&M and Uniqlo and places like Primark ... the competitive intensity is only going to go up," Martinez said to Business Insider in a phone interview.
But the one place Abercrombie & Fitch is outpacing its peers? Digital.
"I would start by saying that I think ... [we have] the best in class in terms of direct to consumer and digital business model. 24% of our business is done direct to consumer in 2015 and that number is only going to go up as we seek to engage more aggressively in the digital space," Martinez said. "So I think that is a distinctive skillset that we have ahead of our competitors."Abercrombie & Fitch's digital business appears to be resonating with the younger, phone-obsessed demographic; on its fourth quarter earnings call, the retail revealed the 40% of its direct-to-consumer sales were completed via mobile devices.
That's incredibly crucial, especially considering the other problems that Martinez admitted are plaguing the industry as whole - and those shuttering stores.
But Martinez swears that he won't be doing one thing that some other retailers are doing to salvage themselves.
Abercrombie will "not rely on promotions to drive our business," he said.