RetailSails

With 1st Quarter earnings season coming to an end, it’s becoming quite clear that not all retailers should be painted with the same brush.  Taking a look at 3 apparel retailers targeting young men & women, we can see that some retailers have not only held up better than others, but have been able to thrive in an extremely tough environment.  Here is a snapshot of Abercrombie & Fitch, American Eagle Outfitters, and Aeropostale:

While they are the smallest of the three, Aeropostale has shown stronger top line growth throughout the decade.  More impressive has been their strong same-store sales performance over the past 18 months:

Abercrombie & Fitch has struggled the most as they were hesitant to cut prices in order to “protect the brand.”  Some comments from the Q1 conference call tell the story:

The first quarter was clearly a difficult one for us with the challenging economic environment, we continue to face a headwind where the consumer is reluctant to spend on premium brands. There is a price consciousness dictating shoppers’ purchases today, unlike anything I have seen before.

We are actively planning for meaningful reductions in our average unit retails, while remaining committed to protecting our initial mark-up percentage and providing quality product.

As cost-cutting continues for the rest of 2009, the growth in store openings will likely slow as it has already started to level off over the past 6 months:

Aeropostale has also outperformed on a sales per average square foot basis throughout the years:

As the least expensive of the 3 premium brands, Aerpostale has been able to not only outperform relative to their peers, but continue to post record top and bottom line results in the toughest retail environment in decades.  They also got a late start on their e-commerce business, and while online sales in 2008 showed growth of 85% over the prior year, that channel still makes up only 4.2% of total sales.