Whenever we hear that a teen retailer has hired Goldman Sachs Group it usually means there’s big news (or trouble) brewing at the brand. As we reported last month, the popular retail chain has been hit hard recently by off-trend fashion choices especially the heavy emphasis on colorful prep styles, and a variety of other issues. However CNBC said that Goldman was hired to keep activist Relational Investors at bay during Abercrombie and Fitch’s challenging time.

Competition from fast-fashion retailer Forever 21 is always nipping at the brand’s heels with fast apparel on trend at cheaper prices, and American Eagle continues to provide great competition for the brand (see also Label Networks’ Spring and Summer Youth Culture Studies 2012).

According to Jack Ablin, chief investment officer of Harris Private Bank in Chicago, “The problems with Abercrombie are probably contained within their own walls, though, as the retail sector in general continues to hold up.”

According to Reuter’s, investor Michael Bigger of trading firm Bigger Capital, who owns Abercrombie shares, said news that it hired Goldman gave the stock a short-term boost. He said he was betting on a bid at a multiple of 15 times for the stock should there be buyout offers.

Abercrombie is expected to earn $2.53 a share in 2013, according to Thomson Reuters I/B/E/S. The company reported that sales at stores open at least a year fell 10 percent during its fiscal second quarter. While sales are hurting at home, the company has more stores in Europe than American Eagle and Aeropostale Inc., but said it has frozen plans for new international stores.

In Europe, Abercrombie has had to compete with Sweden’s H&M which is still going strong and is the world’s second-largest fashion retailer, whose sales grew in July for a third straight month.

In August, Abercrombie said it was increasing sourcing from the United States and Central America, which are typically more expensive than Asia, to shorten the time between placing orders and getting clothes into stores, in a bid to compete with fast-fashion retailers such as H&M.

Abercrombie shares closed up 5.4 percent at $37.9 on the New York Stock Exchange.