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Abercrombie & Fitch sets an aggressive e-commerce goal
CEO Mike Jeffries sees direct sales, which are all online, one day reaching $1 billion.
Sales were up across the board, including online, for specialty apparel chain retailer Abercrombie & Fitch Co. in the second quarter. But the company expects to close up to 65 stores this year as it lays plans to eventually become a $1 billion e-commerce brand.
For the second quarter ended July 30, Abercrombie, No. 56 in the Internet Retailer Top 500 Guide, reported:
- Web sales increased 28.1% $102.1 million from $79.7 million in the second quarter of 2010.
- Total sales grew year over year 22.9% to $916.8 million from $745.8 million.
- Comparable-store sales increased 9%.
- Net income increased 64.1% to $32.0 million from $19.5 million in the second quarter of 2010.
Internet Retailer estimates the web accounted for 11.1% of total sales compared with 10.7% in the second quarter of 2010.
During the second quarter earnings call with Wall Street analysts, CEO Mike Jeffries says Abercrombie plans to reach annual web sales of $1 billion in the foreseeable future, although he didn’t provide a timeline or additional details. He also told analysts that Abercrombie, which recorded web sales of $352.5 million in 2010 and currently operates 1,073 Abercrombie & Fitch, Abercrombie Kids, Hollister Co. and Gilly Hicks stores in the U.S., will close up to 65 underperforming stores this year.
“Our direct-to-consumer business again posted strong growth of 28% for the quarter, as we work toward our $1 billion goal,” Jeffries told analysts. “This business remains a major strategic priority and source of investment.”
For the first two quarters:
- Web sales increased 30.2% $207.9 million from $159.7 million in the first two quarters of 2010.
- Total sales grew year over year 22.4% to $1.75 billion from $1.43 billion.
- Net income increased 641.6% to $57.1 million from $7.7 million in the first two quarters of 2010.
Internet Retailer projects the web accounted for 11.9% of total sales compared with 11.2% in the first two quarters of 2010.