Abercrombie tanks as it ends talks over potential deal

Shares in Abercrombie & Fitch tanked in pre-market trade after the clothing retailer said it has terminated discussions regarding a potential transaction.

Back in May, the company said it had begun preliminary discussions with several parties regarding a potential transaction after receiving expressions of interest. However, after a "comprehensive review of all relevant factors" it has decided that the best way to enhance value for shareholders is through the "rigorous execution" of its business plan

Executive chairman Arthur Martinez said: "We believe in the prospects for our business and the opportunities for our brands. We are generating solid comp store sales momentum at Hollister and continue to refine and implement strategies to position the Abercrombie brand for revitalised performance.

"Our strong management team and dedicated people, the investments we have made in marketing, omni-channel and other strategies to drive sales, together with our relentless focus on operational efficiencies, all contribute to our expectation for improved trends beginning in the second half of the year, compared to the prior year period. We are committed to taking sound, aggressive action to deliver enhanced performance and long-term stockholder value."

At 1405 BST, the shares were down 12.5% in pre-market trade to $10.64.