Abercrombie & Fitch’s Hollister Poised To Profit From Bankruptcy Of Fellow Teen Retailers

While teen retailers like Aéropostale and PacSun are going down in flames, their rivals are hunched on the sidelines, waiting to pick their bankrupted bones clean. There’s still money to be made catering to teenagers, after all, and analysts say Abercrombie & Fitch could be the one making it.

The company’s Hollister brand and specialty clothing company Zumiez have the most overlap with failing teen mall staples like Aéropostale, PacSun, QuikSilver, Wet Seal and others that have declared bankruptcy and closed stores recently as they try to restructure, MarketWatch reports, which provides an opportunity to zoom in on some market share.

Analysts at Keybanc Capital Markets analyzed more than 1,400 Aéropostale and Pacific Sunwear locations and compared them with Hollister, American Eagle Outfitters, Zumiez, and Tilly’s Inc, and found that Hollister and Zumiez have the most exposure at malls where Aéropostale and Pacific Sunwear stores are located.

Aéropostale filed for Chapter 11 bankruptcy earlier this month and is expected to close 113 U.S. locations and 41 in Canada. PacSun joined the bankruptcy club in April, though it has yet to announce plans for store closures.

“Long term, we expect Hollister and Zumiez to benefit from the reduced competition,” KeyBanc analysts wrote.

Abercrombie & Fitch could use some good news, with its recent turnaround efforts stymied by traffic declines, especially among tourists. Hollister is currently a bright spot at the company, with Abercrombie & Fitch president and Chief Merchandising Officer Fran Horowitz-Bonadies talking up the “double-digit lift in traffic and sales” the brand is experiencing on a recent earnings call reported by MarketWatch.

The company isn’t making any secret about its desire to capture the teen retail throne, either.

“Our focus for Hollister is to be the iconic brand for the global high school consumer,” said Horowitz-Bonadies.

Abercrombie & Fitch expected to benefit from overlap with bankrupt teen retailers [MarketWatch]

by Mary Beth Quirk via Consumerist