American teen fashion label Abercrombie & Fitch is going to increase the international presence of both Abercrombie and Hollister, even though an earlier expansion in Europe did not prove to be very successful.
Focus on Asia instead of Europe
Abercrombie will open new stores in Seoul and Shanghai, while Hollister will get twenty new locations, including Australia, Dubai and Japan. The new locations should help in achieving the expected growth of 15% profit per share each year.
The stores outside of the United States already comprised 40% of sales of Abercrombie & Fitch in 2012 (about 3.5 billion euro) and the impact of foreign sales will keep rising as the company is planning on closing stores on the American market. This year about fifty locations will be closed, within three years 180 locations will have gone.
The internationalisation has not been a great success until now: last year the company decided to slow the European expansion due to the economic crisis and disappointing sales. The focus on expansion in Asia should solve that problem.