Abercrombie & Fitch Must Suck In Its Gut

Abercrombie & Fitch (ANF) may shed some of its store base when its leases expire over the next two years.

During a meeting with J.P. Morgan analyst Brian Tunkick, Abercrombie & Fitch management threw around words like "over-saturated" and "money losing stores," Tunick wrote in a note on Monday.

Over the next two years 210 leases are set to expire, or 20% of the store base, and Tunick says this could mean Abercrombie & Fitch will close some stores or negotiate for better lease terms.

Tunick expects the most potential closures at the Abercrombie & Fitch core concept, which he says could stand to lose about 100 stores. Currently there are 354 Abercrombie & Fitch locations.

The company has already begun trimming its portfolio with the closure of all 29 of its Ruehl stores.

That chain had been a drain on the company's profits and had contributed to some of the worst same-store sales number in the apparel retail space. In May Abercrombie & Fitch reported a 28% plunge in comparable sales. In comparison, Aeropostale ( ARO) recorded a 19% jump in same-store sales, while American Eagle Outfitters ( AEO) slipped 7%.

Shares of Abercrombie fell 1.4% to $25.65 in afternoon trading.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

More from Investing

In Pugnacious Twitter Rant, Musk Proposes Website for Users to Rate the Media

In Pugnacious Twitter Rant, Musk Proposes Website for Users to Rate the Media

One-on-One With Carnival Corporation CEO Arnold Donald (Watch)

One-on-One With Carnival Corporation CEO Arnold Donald (Watch)

Marc Chaikin's Technical Tools: Cramer's Off the Charts

Marc Chaikin's Technical Tools: Cramer's Off the Charts

Carnival CEO Arnold Donald: China Will Become the Largest Cruise Market

Carnival CEO Arnold Donald: China Will Become the Largest Cruise Market

Bitcoin Today: Prices Plummet Below $8,000 in Market Downturn

Bitcoin Today: Prices Plummet Below $8,000 in Market Downturn