Abercrombie terminates talks with potential buyers

Abercrombie & Fitch has said that it has terminated discussions regarding a potential sale transaction, months after it was speculated that the company might be acquired by Express Inc. or American Eagle Outfitters Inc. In May, the company had reported receiving expressions of interest and that preliminary discussion with several parties regarding a potential transaction had commenced. Following today's announcement, the company's shares dropped as much as 17 percent, to 10.11 dollar, in early trading, reports Bloomberg.

Commenting on the development, Arthur Martinez, Executive Chairman of the Abercrombie & Fitch board said in a statement: "After a comprehensive review of all relevant factors, with the assistance of our financial advisor, the A&F Board of Directors determined that the best path to enhance value for stockholders is the rigorous execution of our business plan. We are generating solid comp store sales momentum at Hollister and continue to refine and implement strategies to position the Abercrombie brand for revitalized performance.”

In its first quarter results, the company reported a net loss per diluted share of 0.91 dollar compared to 0.59 dollar for the first quarter ended April 30, 2016. In addition, the company’s net sales for the first quarter of 661.1 million dollars were down 4 percent over last year, with comparable sales down 3 percent. By brand, net sales for the quarter increased 3 percent to 374.7 million dollars for Hollister but decreased 11 percent to 286.4 million dollars for Abercrombie versus last year.

Picture:Abercrombie website