ABERCROMBIE & FITCH CO [ANF]

First Call/Thomson Financial Insiders' Chronicle, April 9, 2001

With the apparel retail index already down nearly 15% on the year, developing trends point toward continued retail weakness. Yet, Abercrombie & Fitch Co. has managed to gain 80% YTD, extending a spectacular rally which began shortly after insiders started accumulating the stock last year. While some on the Street expect Abercrombie to escape the general economic malaise unscathed, others contend that for many retailers, matching 2Q earnings will require irrationally strong sales.

Certainly, skirting such difficult to manage dangers as increased inventory caused by colder-than-normal weather and deteriorating consumer confidence could become more difficult. And remember, analysts were quite bullish on fellow teen retailer American Eagle Outfitters, where insiders dumped a record number of shares ahead of a 30% plunge blamed on weak February comps. Unfortunately, at least the insider selling part of that equation appears to have spread to Abercrombie.

From March 8 through March 20, four insiders filed their intentions to sell 344,186 shares between the prices of $30.99 and $35 per share.

While the stock has performed well, and to some degree profit taking is expected, the issue still trades roughly 40% below its two-year highs. Particularly troubling, this round happens to be the largest since early '99, when insiders sold ahead of a one-year, 75% downturn. And don't forget, not only have insiders timed their sales well, aggressive acquisitions last year proved to be rather prescient.

In recent years, EVP, COO Seth Johnson's trading has been downright inspiring. After buying shares last May, he sold that stock and more in November, booking a 235% return just two weeks before the stock crashed on a weak comp sales announcement. In addition, SVP O'Neill is reversing acquisitions from last May and September with her first sale since filing in January '01.

Insider                                       Shares
SVP, Sourcing Diane Chang                      26,345 [*]
Reduction: over half of actionable position.
First sale since filing in '98.
EVP, COO Seth Johnson                          50,993 [*]
Reduction: over 20% of actionable position.
Timing: bought shares in May '00, then sold
in Nov. '00 for 235% gain, and ahead of
two-week, 35% drop.
SVP, Planning & Allocation Leslee O'Neill      16,848 [*]
Reduction: over 20% of actionable position.
Reversal: bought shares in May '00, exercised
options and held shares in Sept. '00, and is
selling considerably more now.
First sale since filing in Jan. '00.
Chairman, CEO Michael Jeffries                250,000 [*]
(*.)Includes Form 144 Intentions to sell stock.