U.S. teen apparel retailer company Abercrombie & Fitch is working with an investment bank to field takeover interest from other retailers, people familiar with the situation said on Tuesday.
Abercrombie’s shares are trading at a 17-year low, making it a vulnerable acquisition target. The company has struggled as its logo-stamped t-shirts and sweaters, once popular among teenagers, have lost their fashion appeal.
Abercrombie (anf)has hired investment bank Perella Weinberg Partners to handle the takeover approaches, the two sources said, asking not to be identified because the matter is confidential. There is no certainty that any deal will occur, the sources added.
Abercrombie and Perella Weinberg declined to comment.
Based in New Albany, Ohio, Abercrombie has a market capitalization of $862 million. It operated 709 stores in the United States and 189 stores outside the United States as of the end of January.
The company’s operating income shrunk from $72.8 million in 2015 to $15.2 million last year, as fast-fashion competitors and competition from online retailers weighed on its profitability.
Many of Abercrombie’s peers, which also rely on mall traffic for their sales, have faced financial pressure. Aeropostale, Wet Seal, and BCBG Max Azria Group are among the retailers that have filed for bankruptcy over the past two years.
While Abercrombie made its mark in the 1990s with its risque advertising and its large logo on apparel, millennial shoppers have more recently eschewed such heavy branding in favor of more independent style. It redesigned its logo in 2014 to renew its image.
Abercrombie has been pinning much of its turnaround hopes on its surfwear-inspired brand Hollister. While the company’s overall sales are down, the Hollister brand has recorded two years of flat same-store sales performance.
Abercrombie has been seeking to cut costs and downsize its retail footprint. It announced earlier this year that it would let the leases of approximately 60 U.S. stores expire, on top of several other locations it has already closed.
Abercrombie has also made an electronic commerce push, partnering with Asian online retailer Zalora to sell its Abercrombie and Hollister brands.
In 2014, Abercrombie split the roles of chairman and chief executive officer. It also added four independent directors to its board after settling a proxy contest with activist hedge fund Engaged Capital.
Earlier this year, Abercrombie named its merchandising head Fran Horowitz as its new CEO.