Abercrombie & Fitch Retains Goldman in Face of Pressure
Abercrombie & Fitch has retained Goldman Sachs as an advisor in the face of continued pressure from Relational Investors, say people familiar with the matter.
As of the second quarter, Relational reported an increased stake of 3.8 percent in the struggling retailer, which tapped Goldman to field suggestions from Relational.
Some of those have been evidenced in Abercrombie & Fitch recent earnings release — namely, a commitment to reducing store openings and cutting the capital expenditures budget for the rest of the year. (Read More: Abercrombie’s Profit Sinks as Fashion Evolve.)
During that quarter, net income fell 52 percent — and the stock has lost 45 percent of its value in the last year.
Abercrombie has pointed to weakness in Europe during its continued downturn as one large reason for its underperformance, but the stock hasn't rebounded much with the overall market as some European concerns are mitigated. (Read More: 10 Best Cities for Shopping.)
At this point, it's unclear how much pressure Relational's Ralph Whitworth will put on the company — but sources tell me Goldman remains retained as shares see continued weakness.
Abercrombie declined to comment, as did Goldman Sachs.
UPDATE: Sources told CNBC on Thursday that Abercrombie first hired Goldman in June. (Watch video for more.)
—By CNBC’s Kayla Tausche; Follow Her on Twitter @KaylaTausche