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Abercrombie Goes after Grown-Ups

Attempting to clean up its image and stabilize growth after more than a year of same-store sales declines, Abercrombie & Fitch plans to raise prices and open a new type of store targeting sophisticated females.

CEO Mike Jeffries told analysts in a conference call said while there are no plans to close abercrombie stores for children, the company will focus on an older demographic, particularly women. Four new prototype stores will open in August. No further details were disclosed.

Some analysts were skeptical. "While moving away from the teen segment is would take several years until a new concept could impact results of this 700-store chain," said Anne-Marie Peterson, an analyst at Thomas Weisel Partners LLC.

Jeffries said Abercrombie & Fitch would increase prices on selected items at selected stores. Again, he didn't provide specifics. And still, some analysts questioned the decision. "While that theoretically sounds good, we've never heard of raising prices to jump start problem product," said Prudential Financial analyst Stacy W. Pak. "If it won't sell at lower prices, why would it possibly sell at higher prices?"

During the past year, the company has been getting rid of coupons and discounts to reinforce its image as a full-priced retailer.

Analysts were pleased that total fourth-quarter sales rose 4.9 percent to $560.40 million from $534.40 a year earlier, but disappointed that comp store sales declined 14 percent at the Abercrombie & Fitch chain and 7 percent at abercrombie.

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