Shares in two of America’s largest clothing retailers plunged on Friday following disappointing third quarter sales and a downbeat forecast for the crucial holiday shopping season.
Gap shares sank by 13.1% after a seventh consecutive quarter of falling revenue and warned that fewer people were visiting stores.
Abercrombie & Fitch’s stock fell 13.9% on poor sales and a weak outlook.
Both have been attempting to revitalise their brands, with limited success.
Neil Saunders, chief executive of Conlumino, the retail research company, pinned the blame for Abercrombie & Fitch’s poor figures on a failure to communicate with customers about the changes it has made to its fashion lines.
Once known for its picture-perfect models and sales assistants, as well as Abercrombie & Fitch monogrammed garments, the retailer has shifted “towards a more inclusive and gentler approach with an emphasis on stylish, quality clothing”, said Mr Saunders.
However, a “confusing” marketing campaign, poor foot traffic at both its flagship and mall-situated shops and warmer weather resulted a 6% fall in third quarter sales to $821.7m and an 80% slump in profit to $7.9m.
Abercrombie & Fitch said it expects business to remain challenging for the rest of the year, which includes Black Friday, the post-Thanksgiving Day shopping jamboree, as well as Christmas and the New Year.
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