Citadel Buys Abercrombie Stake as Hedge-Fund Interest Grows

Tuesday, 20 Nov 2012 07:13 PM

 

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Billionaire Ken Griffin’s Citadel LLC bought a 6.3 percent stake in Abercrombie & Fitch Co., adding to increased interest in the teen retailer by hedge funds in the past three months.

Griffin and funds of Chicago-based Citadel held 5.2 million Abercrombie shares as of Nov. 14, according to a regulatory filing Tuesday. The hedge fund is the third-largest investor, data compiled by Bloomberg show. Tudor Investment Corp., Wexford Capital LP and Steven A. Cohen’s SAC Capital Advisors LP also boosted stakes in Abercrombie as of Sept. 30, the data show.

Citadel made the purchase after activist investor Ralph Whitworth’s Relational Investors LLC built a 5 percent holding in the New Albany, Ohio-based retailer. The investor has pressed for changes at the company, a person familiar with the matter said in September.

Abercrombie surged a record 34 percent on Nov. 14 after raising its annual profit forecast and posting third-quarter earnings that exceeded analysts’ estimates. It was a reversal compared with August, when the retailer reported an 8 percent decline in same-store sales in the six months ended in July and forecast a 10 percent decline for the second half of the year.

Citadel, which has pressured E*Trade Financial Corp. to sell itself as the company’s largest shareholder, trades about 13 percent of U.S. equity volume through its securities unit, according to its website.

Abercrombie’s shares rose 0.1 percent to $43.83 at the close in New York. The stock has declined 10 percent this year, compared with a 26 percent increase in the Standard & Poor’s 500 Retailing Index.

Activist investor Daniel Loeb’s Third Point LLC exited its position in Abercrombie in the second quarter, selling 1.85 million shares, data compiled by Bloomberg show.

© Copyright 2014 Bloomberg News. All rights reserved.

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