Fashion retailer Abercrombie & Fitch is the latest US chain to post disappointing results.
Shares ditched almost 14 per cent in the pre-market in New York as the company revealed its 14th consecutive quarterly sales decline.
It blamed the slump on lower traffic at its out-of-town stores and a drop off in tourist spending. Same-store sales fell by a slightly steeper-than-expected four per cent in the second quarter.
Lower budget fashion retailers including H&M and Zara have been piling the pressure on the likes of Abercrombie & Fitch, with spending-conscious shoppers increasingly likely to hunt out bargains.
The strength of the dollar has also dragged on tourist spending.
Total revenue dropped by four per cent to $783.2m (£597.5m) for the quarter. The company’s net loss was $13.1m, or 19 cents a share, compared with a loss of $800,000 a year ago. Analysts polled by FactSet had expected a loss of 20 cents a share on $783m of revenue.
The Hollister brand also struggled despite its relative resilience to the slowdown in recent quarters. Hollister sales at stores open at least a year fell two per cent.
Executive chairman Arthur Martinez said:
Flagship and tourist locations continued to account for the vast majority of the comparable sales decline as traffic remained a significant headwind. As we look to the rest of the year, we now expect flagship and tourist locations will continue to weigh on the business.
At the end of last year, brand president Christos Angelides left Abercrombie & Fitch after just over a year at the struggling US fashion label.
Angelides, who is credited with being the driving force behind much of Next's success, left the UK high street retailer last autumn. While he notched up 28 years at Next, he managed just a year and two months at A&F.
The year before that, controversial chief executive Michael Jeffries resigned right before the busy Christmas trading period.
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