The A&F Co. has announced it is closing up to 40 stores by next February.
According to CNBC, most of the stores closing are located in the United States. Over the last eight years, the retailer has shuttered about 475 stores, and has also reduced the size of its stores and remodeled existing locations. In fiscal 2018, the retailer closed 29 stores, with more possible since around 50 percent of its leases expire within the next few years. However, in addition to the closings, the company does plan to invest approximately $120 million in store experiences in 2019, including 85 new stores experiences and 40 new stores.
CEO Fran Horowitz told analysts on the conference call that the company is “carefully evaluating closed stores when appropriate.”
Shares of Abercrombie soared about 20 percent on Wednesday (March 6) after the company beat Wall Street estimates for earnings and reported strong same-store sales growth. During Q4, the company earned $1.35 per share, which beat the projected $1.15 per share. It also reported same-store sales growth of 3 percent, beating Wall Street’s forecasts of 1.5 percent.
Abercrombie is the latest retailer to reveal plans to shutter stores. Last month, Payless won approval from a bankruptcy court to begin closing its 2,500 stores in North America, effectively putting 16,000 employees into eventual unemployment. The current plan is to close all Canadian operations by April 30, and all U.S. locations by May 21. In order to retain some workers through the closings, the company will spend about $8.6 million in bonus pay.
“We are pleased that the Court has approved our First Day motions, which are a crucial step in our execution of an efficient wind-down of our North American stores and eCommerce operations, and to maximize the value of the merchandise being sold,” Stephen Marotta, chief restructuring officer for Payless, said at the time.
Charlotte Russe also announced in February that it will close around 95 locations as it searches for a buyer after filing for Chapter 11, and just this past week, Dollar Tree said it will convert roughly 200 Family Dollar stores to its eponymous brand, while closing as many as 390 locations. In 2015, the retailer bought the Family Dollar chain for almost $9 billion in stock and cash, but since that time, the chain has faltered and brought down Dollar Tree’s performance.
Stripe’s application for a banking charter has been accepted by the state of Georgia’s Department of Banking and Finance, bringing the financial infrastructure giant one step closer to directly accessing payment card networks.
In a PYMNTS exclusive, Stripe detailed that the Merchant Acquirer Limited Purpose Bank (MALPB) charter will allow the firm to broaden its payment processing offerings — in this case, to obtain direct membership in the U.S. with Visa and Mastercard and to process payments without a sponsoring bank (known as a BIN sponsor).
Stripe’s membership with the card networks is a complement to existing processing and settlement activities and will not lead to a replacement of existing banking relationships or acquiring BIN sponsorships — nor is the MALPB a signal that Stripe is expanding into additional, traditional banking activities.
The scope of the charter is limited to merchant acquiring and does not include deposit taking or similar banking activities; the charter/application itself, as detailed here, mandates payment volume capital and various capital requirements that are based in part on traditional banking standards and also “capital standards and those applicable to similar entities currently operating as merchant acquirer members of card networks in the European Union (EU) under the framework established in the Payment Services Directive (PSD).”
There’s some prologue here for membership in the United States, as the platform already is a direct member in nine markets around the globe, including in the United Kingdom.
A Stripe spokesperson told PYMNTS that “over the past few years, as Stripe’s business has grown, we’ve significantly expanded the number of banking and other partners we work with,” adding that the Georgia MALPB is a “step follows in this strategic direction.”
In terms of the mechanics of the membership, acquirers that are member networks directly process and settle transactions with Visa and Mastercard and bypass payment processors — where the result can be faster payouts and lower transaction fees for the acquirer while cementing merchant loyalty to acquirers as costs are reduced for both the acquirer and the merchant.
The direct relationships with the payment networks eliminate the steps tied to debit/credit card transactions, and the intermediary relationships, where payment processors send transactions to the networks, the transactions are routed through issuing banks, and approvals are sent back through the processor before funds are released.
The Stripe news comes after Fiserv had received approval from Georgia’s DBF in the Fall of 2024. At that time, and as PYMNTS reported here, CFO Robert Hau noted on an earnings call, “This is a special purpose charter that enables optionality for sponsorship for merchant acquiring. It’s important to clarify that Fiserv is not becoming a bank. Fiserv will not open branches, take deposits or write loans as traditional banks do.”
Only one other firm has received the charter since its 2012 launch, Credorax, an Israeli firm later known as Finaro before being acquired by Shift4.
