A&F Or LVMH Acquisition

Recent M & A activities in the industry become more frequent.

Following the acquisition of Kate Spade by LVMH and Dior, Coach and Fitch are the latest news.

According to the world clothing and shoe net, Abercrombie & Fitch has approached the digital buyers through the investment bank Perella Weinberg Partners, including American Eagle Outfitters and Express.

A&F confirmed this message on Wednesday, but said "communication is still in its initial stage" and "does not guarantee that these exchanges will bear fruit."

Abercrombie & Fitch have been in trouble for a long time.

Revenue has declined from $7 billion 400 million to $967 million in the past 10 years, and sales per square foot fell to $343 from $500 in 2006, while shares fell 40% in the past year.

In fact, more than A&F.

Although many American retailers

They are all affected by the decline of market traffic, the change of consumers' tastes and the impact of fast fashion brands, but the situation of American youth retail brands is particularly difficult.

Several competitors, including A ropostale, Wet Seal and American Apparel, have filed for bankruptcy last year.

Comparison of shopping bags design before and after A&F pformation

Shop design before pformation

New Look

Abercrombie & Fitch has been struggling for pformation for three years.

It took two years to find a new manager after CEO Mike Jeffries Jeffries was expelled in 2015 for 23 years.

In September last year, A&F also launched a large number of advertising campaigns aimed at sexing, teenagers, targeting the mature group of the millennial generation, and reinstalling the store to make its overall style more concise and mature, but received no positive feedback. The same store sales fell for four consecutive quarters.

Analysts' point of view is that the reshaped products lose their characteristics and cannot differentiate themselves from other brands, and people's perception of "A&F is a teenager brand" is hard to change in the short term.

A&F's sister brand Hollister is doing well. It reintroduced Gilly Hicks, a popular lingerie product line popular with consumers last year, and its same store sales increased by 1% last quarter.

Public opinion also holds that Hollister is the real interest of the acquirers, because the "Southern California wind" has a place in the minds of American consumers, and it belongs to the same category as American Eagle and its underwear brand Aerie, and has complementary styles.

American Eagle

Express

However, American Eagle and Express Express, who have expressed their intention to purchase, are also in jail. It is hard to tell whether the resource integration of youth brand holding style heating will bring more advantages or risks.

Express and A&F belong to The Limited group. They are older and have only 15 minutes' distance from A&F headquarters.

It recently announced that it would withdraw from the Canadian market and shut down 17 stores, bringing the total number of stores to 650.

In the past year, its share price has fallen by half, and its market value has dropped to $700 million.

The situation of American Eagle is relatively good.

Its recent market capitalization reached 2 billion 400 million dollars, with 1000 stores and more than 900 of A&F's.

But earlier this month, Adrienne Yih Tennant Tennant, an analyst at Wolfe research firm, just reduced its brand rating from "market average" to "poor performance". It thought it was fragile in the background of declining market traffic, promotions and changes in consumer demand.

Although many analysts are not optimistic about the prospect of A&F's acquisition, after the announcement, the stock price that has been declining for one year has finally ushered in a rebound of 18% yen, which is a rare piece of good news in recent years.

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