Teen apparel retailer Abercrombie & Fitch Co. has entered into a wholesale agreement with Zalora, a major fashion e-commerce company based in Singapore and operating in six markets, including Singapore, Hong Kong, Taiwan, Malaysia, Indonesia and the Philippines.
Starting next week, Zalora will offer Hollister-branded merchandise through its online stores, followed later this month by Abercrombie & Fitch product.
The partnership gives Abercrombie access to more than 600 million Zalora customers, who enjoy speedy deliveries of their orders from the apparel site — as fast as three hours in some markets — and free return windows as long as 100 days.
Abercrombie & Fitch — which has enjoyed ardor overseas that never cooled quite as much as it did here in the U.S. — is working to solidify its presence in Asia. Zalora, which has captured the attention of millions of Southeast Asian shoppers since launching five years ago, is a good choice of partner. Zalora last week inked a similar deal with Topshop.
Back home, Abercrombie & Fitch's investments continue to fall flat. The recovery that seemed nascent in 2015 and continued in 2016 has devolved into a significant slump. The company’s Q4 same-store sales fell 5% and Q4 net sales fell 7% to $1.036 billion. However, direct-to-consumer and omnichannel sales grew to 31% of total company net sales, compared to 28% in the year-ago quarter, and for the full year, the category grew to 26% of total company net sales, up from 24%. Abercrombie's more youthful Hollister surf brand (the first emissary in its Zalora launch) generated uplift as well: While Q4 same-store sales at the flagship Abercrombie brand dropped 13%, Hollister posted a 1% increase in the period, its first in a year.
Abercrombie plans to shutter 60 U.S. stores in coming months as leases expire and will open six full-price stores, including four in the U.S. Last year, the company closed 54 stores, mostly in the U.S., and opened four full-price U.S. stores, six U.S. outlet stores, and — in another sign that sales are better abroad — 10 stores overseas.
“Fortunately, [Abercrombie & Fitch] has a fairly strong balance sheet and remains profitable, which provides some comfort that it has the time and financial firepower to try and turn things around,” GlobalData Retail managing director Neil Saunders said in an email to Retail Dive last month.