American Eagle, Abercrombie and Aeropostale Hurt By Fast-Fashion Retailers

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Investors should consider moving on as the group’s situation may deteriorate further.
The past year has seen Abercrombie shares decline by 24%, American Eagle by 40%, and Aeropostale by 63%, and that is not considering dividends. 
The decline may be because of a decrease in mall traffic and market saturation, but the biggest culprit is called fast-fashion.  Traditionally, retailers have maintained low costs with high margins.  This was achieved by placing large orders for a small range of garments by season.  This often resulted in excess stock which prompted clearance sales. 
Fast-fashion works differently.  Large amounts of fabric are ordered and factories contracted prior to designing.  Garments are ordered on an as-needed basis, which allows for receipt of new items in short periods of time.
This shift in consumer buying may force traditional retailers to reduce their store numbers, as fast-retailers are looking to increase store numbers by 10% per annum over the next few years.

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