Abercrombie & Fitch Co. terminated talks with potential acquirers, dashing hopes of investors who saw a takeover as the best way to rescue a retailer struggling to rekindle its appeal with shoppers.
The move send the shares down as much as 20 percent, to $9.77 in New York, the biggest intraday decline in more than 10 months. The announcement followed months of speculation that Abercrombie might be acquired by Express Inc. or American Eagle Outfitters Inc.
In leaving the bargaining table, Abercrombie has few easy options. The retailer was a mainstay of shopping malls and college fashion in the ’90s and early 2000s, but it’s lost much of its allure. The company also has been hit hard by a broader slowdown in mall traffic and the shift of shopping online.
Chairman Arthur Martinez pledged “sound, aggressive action” to enhance shareholder value over the long term, according to a statement. The company pointed to solid comparable sales at its Hollister business and said it’s following through on measures “to position the Abercrombie brand for revitalized performance.”
In May, Express and American Eagle Outfitters were said to be discussing a takeover of the company and news of the deal caused shares to jump at the time. The company’s stock had risen 1.3 percent this year through Friday’s close, trailing the 8.3 percent gain in the Standard & Poor’s 500 Index.
The retail industry has been shaken by bankruptcies and a rising tide of store closures this year as consumer preferences also shift to spend on experiences such as food and travel instead of physical goods.
Abercrombie didn’t disclose details on any proposed deals and said it wouldn’t comment further on the discussions.