The Abercrombie & Fitch store prototype in Columbus, Ohio.
Abercrombie & Fitch Co. is slated to post first-quarter earnings results on Thursday — and they could be even worse than the already dire ones that analysts forecast.Wall Street's consensus estimate for the quarter pegs the retailer's net loss at 70 cents a share, on sales of $651 million. In the year-ago quarter, the company posted a loss of 59 cents a diluted share on revenues of $685.5 million.Matthew R. Boss at J.P. Morgan Chase said Tuesday the loss could be as high as 76 cents, noting that the core Abercrombie concept has had a “promotional stance” throughout the first quarter.Wolfe Research’s Adrienne Yih has an “underperform” rating on shares of Abercrombie, noting that a potential comparable-store sales upside for the Hollister concept would be offset by negative comps at the Abercrombie & Fitch brand. Her rating for the stock was due in part to “low visibility into comp turnaround given anemic traffic and deeper promos,” as well as limited historical examples of successful brand repositioning in retail.Wunderlich Securities Inc.’s Eric Beder on Monday reiterated his “sell” rating on shares of Abercrombie. “We believe the company has continued to be unable to find answers to the riddle of turning the namesake brand,” the analyst said, adding that “with no real path to recovery in the near term and what we view as somewhat futile attempts to sell itself, we see limited positives and reiterate our 'sell' rating.”Beder also said he believes the company will miss first-quarter Street expectations for a loss per share of 70 cents and a comps decline of 5 percent. The analyst said that his team’s pricing surveys indicate “an almost continuous free fall in pricing integrity at the namesake chain, as we believe the shift to older customers was misguided and has not worked."Further, Beder didn’t think that Abercrombie would be able to obtain a cash premium for selling itself due to limited cost synergies, weakness in the Abercrombie brands and a history of “disastrous specialty retail mergers.” He has a $12 price target for shares of Abercrombie.Trading in the retailer's shares were halted for about six minutes Wednesday afternoon before spiking up 6.8 percent in the early afternoon following a Wall Street Journal report that private equity firm Cerberus Capital Management was teaming with American Eagle Outfitters on a possible joint bid for the retailer. The shares ended the day’s trading session up 5.7 percent to close at $12.89. Shares of American Eagle saw a slight gain of 2.3 percent to close at $11.32.A representative for American Eagle said the retailer’s policy is to “not comment on market speculation,” while an A&F spokeswoman said the company isn’t commenting beyond a statement on May 10 acknowledging that it was in “preliminary discussions with several parties regarding a potential transaction with the company.” A spokesman for Cerberus did not return a request for comment.Les Berglass, founder, chairman and chief executive officer of executive recruitment firm Berglass + Associates, was one of the first to note private equity’s interest in retail.According to Berglass, American Eagle buying its competitor down the mall could work if it “believes that it could source goods so efficiently that it could make a profit, even if the [Abercrombie] brand remained flat.” But he also cautioned that kind of thinking “only works some of the time,” provided the sourcing and expected efficiencies are managed correctly.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
This Just In: Industry sources have told WWD that Anastasia Soare is rumored to be considering selling her beauty business, @anastasiabeverlyhills. According to those sources, Soare has tapped investment bank Imperial Capital to explore sale options for her eponymous beauty brand –– and with at least $340 million in net sales, this would be a big deal. Put in context of other recent transactions for makeup companies, Soare’s price tag could be in the billions if she were to sell the whole thing. #wwdnews #wwdbeauty (📷: @clint_spaulding)
@assouline’s latest book, “The Spirit of Bentley: Be Extraordinary” captures the adventurous attitudes and opulent lifestyles of @bentleymotors’ most creative owners and enthusiasts throughout the U.K. The 292-page hardcover has a section dedicated to showing its team of skilled artisans and photos of its most colorful owners, from George Bamford to designer @alicetemperley, pictured here by Aline Coquelle. #wwdeye
@google released its report on the most popular search terms this year. For fashion brands, the list was led by @gucci, the luxury brand that stunned the market last October when it pledged to stop using fur. Runner ups were @supremenewyork and @fashionnova, along with more established brands like @louisvuitton, @chanelofficial and @ysl. #wwdfashion (📷: @aitorrosasphoto)
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)