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Pricey Abercrombie & Fitch lands in thrifty Canada
By MARINA STRAUSS
Friday, January 20, 2006 Page B6

U.S. fashion retailer Abercrombie & Fitch Co. opened its first three stores in Canada yesterday, bringing its hip but pricey casual styles to a market known for its thrifty consumers.

In its first foray outside of the United States, Abercrombie launched one store under its namesake and two Hollister outlets -- which carry less expensive lines -- in the Toronto area, enjoying a "massive" response, said Tom Lennox, spokesman for the company.

"It exceeded our expectations tenfold," he said. "It's huge."

It plans another A&F in Toronto and one A&F and a Hollister in Edmonton this year, bringing to six the number of stores in Canada this year. "If the response continue as it has in the first day, we think there is a huge opportunity," he said.

Industry observers point to higher prices at A&F that may scare some penny-pinching Canadian shoppers away.

Still, the young affluent target customer will be drawn to the cachet of the A&F name, John Williams of retail consultancy J. C. Williams Group said. Many teenagers buy A&F apparel at its U.S. stores.

"It doesn't appeal to everyone," Mr. Williams said.

"Some may find it intimidating. They appeal to mid- to up-market young people."

Hollister serves a younger market at a lower price level -- 30 per cent lower than A&F.

It's similar to Gap Inc.'s divisions of higher-priced Banana Republic and mid-priced Gap stores.

Despite the higher prices, Abercrombie enjoyed a strong financial performance last year despite some tough years of declining or flat sales at stores open at least a year at the beginning of the decade.

The chain is known for its flashy, sensual marketing that tends to show a lot of flesh and sometimes attract a lot of controversy.

The Ohio-based retailer, with about 840 U.S. stores, has pitched thongs for preteen girls and published a R-rated magalog featuring naked models.

But it outperformed competitors during the past holiday shopping season with its focus on what it calls "casual luxury" for college-age customers who pay $198 (U.S.) for a pair of jeans and $250 for a hooded parka trimmed with faux fur.

ANF (NYSE) fell $1.26 to $61.70.