Abercrombie & Fitch 2014 Annual Report Download - page 3

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PART I
ITEM 1. BUSINESS.
GENERAL.
Abercrombie & Fitch Co. (“A&F”), a company incorporated in Delaware in 1996, through its subsidiaries (collectively, A&F and
its subsidiaries are referred to as “Abercrombie & Fitch” or the “Company”), is a specialty retailer that operates stores and direct-
to-consumer operations. Through these channels, the Company sells a broad array of products, including: casual sportswear apparel,
including knit and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters, and outerwear; personal care
products; and accessories for men, women and kids under the Abercrombie & Fitch, abercrombie kids, and Hollister brands. The
Company also sells bras, underwear, personal care products, sleepwear and at-home products for girls through Hollister under the
Gilly Hicks brand. As of January 31, 2015, the Company operated 799 stores in the United States (“U.S.”) and 170 stores outside
of the U.S.
The Company’s fiscal year ends on the Saturday closest to January 31, typically resulting in a fifty-two week year, but occasionally
giving rise to an additional week, resulting in a fifty-three week year as was the case for Fiscal 2012. Fiscal years are designated
in the consolidated financial statements and notes, as well as the remainder of this Annual Report on Form 10-K, by the calendar
year in which the fiscal year commenced. All references herein to “Fiscal 2014” represent the fifty-two week fiscal year ended
January 31, 2015; to “Fiscal 2013” represent the fifty-two week fiscal year ended February 1, 2014; and to “Fiscal 2012” represent
the fifty-three week fiscal year ended February 2, 2013. In addition, all references herein to “Fiscal 2015” represent the 52-week
fiscal year that will end on January 30, 2016.
A&F makes available free of charge on its Internet website, www.abercrombie.com, under “Investors, SEC Filings,” its annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well
as A&F’s definitive proxy materials filed pursuant to Section 14 of the Exchange Act, as soon as reasonably practicable after A&F
electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). The SEC maintains
a website that contains electronic filings by A&F and other issuers at www.sec.gov. In addition, the public may read and copy any
materials A&F files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public
may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The Company has included its Internet website addresses throughout this filing as textual references only. The information contained
within these Internet websites is not incorporated into this Annual Report on Form 10-K.
LONG-TERM OBJECTIVES.
Our objectives are focused on improving return on invested capital through a combination of improving operating margin and
continuing our disciplined approach to capital allocation.
While the specifics of our strategy may change over time, our current priorities to improve operating margin include:
• Improving store productivity and profitability
• Selective international growth
• Increasing direct-to-consumer and omnichannel penetration
• Reducing expense
Our approach to capital allocation includes:
• Continuing to invest in projects that generate the highest risk-adjusted return
• Returning cash to shareholders, subject to suitable market conditions and available liquidity