CNBC - PRESS RELEASES
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September 12, 2012
BREAKING NEWS FROM CNBC’S KAYLA TAUSCHE: ABERCROMBIE & FITCH RETAINS GOLDMAN IN FACE OF INVESTOR PRESSURE When: Today, September 12, 2012 at 1:55PM ET Where: CNBC’s “Power Lunch” Following is the unofficial transcript of breaking news from CNBC’s Kayla Tausche. Following is a link to Tausche's story on CNBC.com: http://www.cnbc.com/id/49006989. All references must be sourced to CNBC |
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TAUSCHE: WELCOME BACK TO POWER LUNCH I AM KAYLA TAUSCHE WITH SOME BREAKING NEWS ABERCROMBIE & FITCH HAS RETAINED GOLDMAN SACHS AS AN ADVISOR IN THE FACE OF CONTINUING PRESSURE FROM RELATIONAL INVESTORS NOW AS OF THE SECOND QUARTER RELATIONAL REPORTED AN INCREASED STAKE OF 3.8% IN THE STRUGGLING RETAILER WHICH THEN TAPPED GOLDMAN TO FIELD SUGGESTIONS FROM THE ACTIVIST INVESTOR. NOW SOME OF THOSE SUGGESTIONS HAVE BEEN EVIDENCE IN A&FS RECENT EARNINGS RELEASE NAMELY A COMMITMENT TO REDUCING STORE OPENINGS AND CUTTING THE CAPITAL EXPENDITURES BUDGET FOR THE REST OF THE YEAR DURING THAT QUARTER THOUGH NET INCOME FELL 52% AND THE STOCK HAS LOST 45% OF ITS VALUE IN THE LAST YEAR. NOW ABERCROMBIE HAS POINTED TO WEAKNESS IN EUROPE DURING ITS CONTINUED DOWNTURN AS ONE LARGE REASON FOR THE STOCKS UNDERPERFORMANCE BUT THE STOCK HASN’T REBOUNDED MUCH WITH THE OVERALL MARKET AS SOME OF THOSE EUROPEAN CONCERNS ARE MITIGATED. NOW AT THIS POINT IT IS UNCLEAR HOW MUCH PRESSURE RELATIONAL’S RALPH WHITWORTH WILL PUT ON THE COMPANY BUT SOURCES TELL ME THAT GOLDMAN REMAINS RETAINED AS SHARES CONTINUE TO SEE WEAKNESS. WE SHOULD NOTE THAT ABERCROMBIE DECLINED TO COMMENT AS DID GOLDMAN SACHS.
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