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Saturday, November 19, 2011

Abercrombie Forewarns... Prices Are Going Up, Fellow Americans!

Lookin' hot in hoodies is soon gonna cost you more.
Photo created and owned by C.E.R., The Sitch on Fitch
Just to give everyone a heads up in the States, Abercrombie & Fitch is planning a "modest" raise in price points....

The decision comes from a problem in maintaining profitability while unit costs - costs including everything from the production to selling of an item - have risen in the double-digits. Increases have been carefully followed since early-2011. Maintaining standard price points in the States, A&F raised prices for its goods in international markets while believing that this would make up for the rise in costs. That continued to ensure revenue growth in America: sales were up 14% for the third quarter (Q3) of fiscal 2011. On the other hand, international revenue continued to grow but at 56% for Q3. It slowed compared to the 74% growth for Q2. Although "macroeconomic headwinds" - challenges against progress in the economy - are blamed for this decrease in international growth, the pricing plan nevertheless "backfired."

And so now prices will also be increased in the American market to make up for rising costs. This price increase for the Abercrombie and Hollister brands will take effect during 2012. A&F maintains that it will be a "modest" rise...so don't fret! The slight rise is planned to help achieve better profit margins. We'll see how things turn out...

Stay FIERCE!

P.S. Incidentally, Abercrombie & Fitch updated its North American price tags for Back-to-School 2011 to include two "tear-off" pieces - one printed with the Canadian price and the other with the US price. Just a random fact.