Abercrombie & Fitch has signed a deal with U.K.-based online retailer Asos to begin selling Abercrombie apparel on Asos.com this holiday season.
It's the first time Abercrombie has entered into a wholesale agreement with another e-commerce retailer.
"Given Asos' strong and growing traffic, this partnership will enable us to increase brand consideration and engagement with an attractive margin structure," CEO Mike Jeffries said during an earnings call with investors.
Asos will only sell Abercrombie & Fitch-branded clothes. The company said that it is continuing to discuss if Hollister items will later be added to the Asos partnership.
The new deal with Asos is part of a larger turnaround effort for Abercrombie as the company seeks to stem declining sales and regain its cool among its teen and college-age shoppers, many of whom have defected to the likes of H&M and Forever 21.
"We are fully cognizant of those challenges and know that we need to be focused, disciplined and at the top of our game to navigate through this environment," Jeffries said during the call.
Asos is another leader in the teen retail space, so the partnership could bode well for the struggling Abercrombie. At the end of its fiscal year last August, Asos shipped to 7.1 million active customers in 237 countries and territories around the world. Annual revenues at the e-commerce company rose 39 percent to roughly $1.2 billion.
Abercrombie & Fitch yesterday reported $822 million in first quarter revenue, a 2 percent decline over the prior-year period but beating expectations of $804 million. Overall company same-store sales fell 4 percent during the quarter, with U.S. same-store sales also falling 4 percent. By brand, same-store sales fell 1 percent for Abercrombie & Fitch, 6 percent for Abercrombie Kids and 7 percent for Hollister.
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