Abercrombie & Fitch Co. (NYSE:ANF) is expanding into Oman, Bahrain, Qatar and Saudi Arabia in alliance with Majid Al Futtaim Fashion. The two organizations already collaborate on eight Abercrombie-owned outlets in Kuwait and United Arab Emirates.
As a result of the deal Hollister, Abercrombie & Fitch, and Abercrombie kids brands will be available in these new geographies from 2017. It is only the second franchise deal for the company which operates 178 international outlets in 20 countries. Mexico’s Grupo AXO launched Abercrombie & Fitch in that nation in 2015.
Majid Al Futtaim runs 135 outlets for Juicy Couture, Lululemon Athletica Inc. (NASDAQ:LULU) and other brands in 7 markets in the Middle East and Africa. It intends to double its outlets in the coming five years.
Abercrombie & Fitch is doing poorly in the US and hence is seeking a footing in the overseas markets. The retailer which was adversely affected in the past decade presently has physical stores in France, South Korea, Singapore, and Belgium among international locations.
CEO of Abercrombie and Fitch, Arthur Martinez opined there will be high demand for the company’s brands in the new markets. International markets accounted for 35% of Abercrombie’s sales last year.
The organization has been struggling for the last few years because of its exclusive image and wrong moves under the stewardship of former CEO, Mike Jeffries. Abercrombie & Fitch has endured 10 consecutive quarters of sales decreases. It has attempted recently to let go its earlier image by reducing sexualized advertising, developing trendier clothing and focusing on diversity.
The Middle East expansion is happening as the company is improving its performance. Some years ago Abercrombie had certain setbacks in its international growth. However overseas sales has done well in the past year .The company’s CFO, Joanne Crevoiserat said the retailer continues to experience significant improvements in global markets.
Abercrombie has 754 stores in America, a number that has decreased in the last few years as the retailer closes down underperforming outlets.
The retailer once famous for its topless models has also been attempting to expand into global markets such as China and the Middle East. Hence it has sought to be respectful to the culture of the countries where it intends to have a presence.