In its recent years, Abercrombie & Fitch has moved away from image-conscious marketing to making operational changes.

As per Scott Lipesky, CFO, the company has focused on running the business with less square footage and less inventory. The company has been able to absorb some of the inflationary pressures large due in part to its store optimization initatives, which cut $115 million—or 20 percent—in occupancy costs last year. A&F’s has been moving away from traditional flagship locations, and instead focusing on smaller format locations.

A&F plans on reinvesting those occupancy savings in fulfillment as it reconsiders its store fleet going forward. In total, the retailer has approximately 250 leases expiring at the end of 2021, representing nearly one-third of its store fleet.

Though the company had a bit of a pause on store remodeling plans during COVID-19, it’s now waiting to see how mall traffic plays out as shoppers return to normalcy.

Although the number of stores the retailer will operate beyond 2021 is uncertain, expansion into Europe is a top priority. The retailer is closely eyeing opportunities across the continent, establishing a London team 18 months ago to get closer to the customer.

A&F also plans to make new investment in the remainder of the year, including building out its data and analytics practice and furthering the Gilly Hicks intimates apparel brand. It recently launched Social Tourist, which was co-created with TikTok stars Charli and Dixie D’Amelio.