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."
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.