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Company: Abercrombie & Fitch Company (ANF)
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  ANF Growth Handcuffed by Auction Rate Securities

Top Contributor: Jonathan J. Smith | Created when NYSE:ANF was $34.85 | Edit | History

ANF has 33% of its cash ($230 million) tied in auction rate securities, forbidding the firm to progress new business ventures in the recovering economy. Two years ago, the auction rate securities market crashed as credit squeezed. In the Wall Street Journal, ANF treasurer Everett Gallagher claimed, "If we had more cash, we'd be running different models, with more stores and more inventory."

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  In direct competition with Victoria's Secret

Top Contributor: Schwabinvestor | Created when NYSE:ANF was $70.86 | Edit | History

A&F's entry into the underwear category with Gilly Hicks makes A&F a direct competitor of the enormously successful Victoria's Secret.

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  Increased promotions too little, too late

Created when NYSE:ANF was $31.36 | Edit | History

ANF has started to discount more of its goods in order to move its inventory. However, its clothes still remain pricier than those of competitors such as Aeropostale, which has become the new go-to store for young consumers looking to save money. ANF's discounts may be too little too late to regain consumers it has already lost to cheaper brands.

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  Fears that it has already peaked

Top Contributor: Schwabinvestor | Created when NYSE:ANF was $70.86 | Edit | History

A&F could be at the peak of its popularity in the US, especially with the notoriously fickle teenage segment of the population. A&F has been forced to tone down its image as it has gone mainstream.

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  Trouble expanding over the future

Top Contributor: Schwabinvestor | Created when NYSE:ANF was $70.86 | Edit | History

Given A&F's rapid expansion over the past 10 years, the company may have trouble expanding at similar rates in the future.

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