Summary
Time has come for both AnF and AE to focus on what they ar eboth successful at, that is the young Juniors and Mens businesses.These Retailers have both a strong status and fashion image among the teen markets, therefore they should stay focued on max. both the sales and gross margin potentials.Lastly by being the best they can be in this zone they will make it difficult forothers toenter( aeropostale is at the opening price zone).
Analysis
The closing of their respective "older brands" will have a one time hit to the bottomline; however, in some cases they maybe able to use the locations to better Max. their primary brands( it maybe a space or location opportunity in the mall).In AnF case i believe that X% of the Ruehl consumer will move over to AnF be it 25-50% if will be a profit margin plus in the respective locations.I also beleive both retailers can take some of the talent back to the brand to amx. the design and store execution.There's no question that the bottom 25% of the exitingbrands players are not as good as the top 25% of the exiting brand.There are other plus to the exiting that can be discussed.
