After a disappointing December, MSSI spending data for January shows the clothing retailer Abercrombie & Fitch Co. (ANF) started the new year off well. Average monthly spending rebounded to be only 10% down compared with October figures, indicating that the firm's market share is still strong enough to compete with its price-slashing competitors.
Across clothing retailers in general, MSSI numbers show that the past quarter has witnessed overall declines in spending by 8.23%. Looking at January '09 compared with January '08, however, tells a different story, the sector has actually seen an increase of 8.60% in monthly spending.
According to the recent article "Abercrombie profit tops view, stock surges", unlike its competitors, Abercrombie's management is committed to keeping its brand strong without resorting to drastic discounting of inventory. Looking at the numbers for Gap, Inc. (GPS), which has seen 15.55% monthly spending declines from September of last year, Abercrombie appears to be performing better.
The firm has also announced that it plans on scaling back its capital expenditures in 2009 to conform with the current market forces. While this, along with the retailer's other cost-conscious measures have proven to please Wall Street so far, with sales from stores open one year or more falling 25% in '08, management will more than likely have to deal with a tight fiscal 2009.
While shoppers looking for a bargain are less likely to shop at retailers like Abercrombie in these times, this strategy has so far revealed favorable results.
This data was compiled by the Geezeo Main Street Spending Index (MSSI).