Editors' Pick: Originally published Dec. 30.
Fashion retailer Abercrombie & Fitch (ANF) recently saw its share price surge after its third-quarter results smashed analysts' estimates. Unfortunately, that recent surge hasn't been enough to give the stock a positive performance for 2015. Shares are still down more than 3% so far this year. Worse still, Abercrombie & Fitch shares declined in each of the four previous years.
So, is Abercrombie among a group of highly dangerous stocks doomed to collapse, or is there a good chance it can turn itself around? What lies in store for the stock?
Abercrombie & Fitch recently appointed Fran Horowitz, who was president of its Hollister brand, to the newly created position of president and chief merchandising officer for the entire company. For now, the company has suspended its search for a new CEO. Horowitz may be just the executive to turn things around. Her resume includes experience at stores such as Express, Bloomingdale's, Bergdorf Goodman, Bonwit Teller and Saks Fifth Avenue.
And even before she took her new position, Abercrombie & Fitch seemed to be taking some savvy steps to deal with its slumping popularity among today's teens. This commentary at Seeking Alpha says that instead of using the obvious tactic of price-slashing to deal with dwindling sales, Abercrombie & Fitch -- which isn't as popular with teens as it once was -- has been reworking its brand to appeal to yesterday's teenagers. In other words, it's changing its clothing, image and shopping experience to appeal more to young adults. Part of this means toning down its once-ubiquitous logos.