Abercrombie & Fitch To Continue Discounting (ANF, ARO, AEO)

Abercrombie & Fitch (NYSE: ANF), the pricey teen clothing retailer, said today it will continue to markdown its clothes in order to boost sales.

Jonathan Ramsden, CFO for Abercrombie, said the company will give up margins to improve its sales. In February Abercrombie said same-store sales were up 5% year-over-year, but average unit prices were down 14% due to discounting. Abercrombie initially refused to markdown its clothing at the start of the recession in 2008 and lost market to rivals American Eagle Outfitters (NYSE: AEO) and Aeropostale (NYSE: ARO).

Sales declined dramatically for Abercrombie during the recession and the company posted nine consecutive quarters of same-store sale declines. Mr. Ramsden said the company hopes to report same-store sales increases for 2010. While impressive, given that every month in 2010 will be compared against double-digit drops in sales is not too difficult to achieve.

Abercrombie is also looking at its real estate portfolio for potential adjustments. It plans on closing more than 200 underperforming stores. Abercrombie hopes to make the brand more exclusive and retain its premium status by cutting back its exposure.

The retailer is forging ahead with international expansion, however, and plans to open Abercrombie & Fitch flagship stores in Copenhagen and Paris.

Shares of Abercrombie hit a new 52-week high today of $43.74 before closing at $43.42.