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Research Paper On Abercrombie And Fittch

692 Words3 Pages

Future External Financing Needs Over the last couple of years (2015-2017) Abercrombie & Fitch has generated some concern on how financially sound it is. In early 2017, ANF was in discussion about selling the company. After much thought ANF chairman Arthur Martinez stated, “After a comprehensive review of all relevant factors, with the assistance of our financial advisors, the ANF board of directors determined that the best path to enhance value for stockholders is the rigorous execution of our business plan” (Bray 2017). ANF target consumer/customer has changed over the past decade. The brand has toned down marketing and redesign fashion to appeal to a young consumer. Moving forward the brand is looking to be a little more grown-up transitioning …show more content…

ANF subsidiaries Hollister, ANF Kids, and Gilly Hicks all contribute to boosting or generating sales for ANF. Hollister generates more revenue of the subsidiaries and is still in high demand. NF Target customer consumers have changed over the past decade the brand has toned down marketing and redesign fashion to appeal to younger consumers moving forward the brand is looking to be a little grown up transitioning from adolescence to adulthood turning customer targets to 18 to 25 years old instead of preteens and teenagers to increase profits and F will have to decrease its levels of debt and if it's generating a lost therefore interest on debt is not well covered by earnings. Hollister generated 57% of ANF in quarter one (Q1) of 2017, which reassure it demand of the subsidiaries. To increase shareholder wealth and per share price, ANF will its level of debt. ANF is generating a loss which may leave debt …show more content…

ANF executives and board members has refrained from share buyback since 2015, then buying back 2.5 million shares at $20 per share. ANF is holding on to this excessive cash possibly for reassurance for dividend payout. Due to the debt to equity ratio ANF relies more on equity than debt to finance its expenses. To maximize shareholders wealth or earnings per share, ANF should consider buying back shares to reduce dividends. With buying back shares the company saves money, and/or it could invest money with other companies which may open opportunity for

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