Abercrombie & Fitch (NYSE: ANF) shares have fallen 17% in the last 12 months (and they've been nearly halved since their autumn peak of $78). Investors who are sticking by this stock should probably go ahead and sell; this retailer probably won't fare well in 2012.

The teen retailer made its share of blunders last year, including the smug announcement that Abercrombie was offering to pay Jersey Shore stars (specifically Mike "The Situation" Sorrentino) not to wear its brand. Although that particular "situation" could make a list of comedic corporate moments of 2011, that incident shouldn't have been amusing to shareholders.

It also wasn't particularly amusing when Abercrombie had to reverse its positive outlook on its European business about two short months after CEO Mike Jeffries had talked up "momentum" in that region.

Last year, many investors probably viewed Abercrombie as a great turnaround story (and this makes it one of my worst CAPScalls -- you can check my track record here), but bear in mind that Abercrombie's current financials represent just a shadow of former success.

The fiscal year ended February 2008 represented Abercrombie at its peak; it reported $3.7 billion in revenue, $5.45 per share in earnings, and its gross profit margin clocked in at 67.2%.

In the ensuing years, this retailer's been trying to return to former glory, and may fall short in 2012. Although analysts expect it to generate $4.2 billion in sales for the fiscal year ended January 2012, they also only expect earnings of $2.81 per share. In the last 12 months, Abercrombie's gross profit margin had continued its downward trajectory to 60.1%.

Abercrombie didn't report its December sales figures, but shareholders have reason to worry. By all accounts, the holiday shopping season this year was a highly promotional one, and that spells worries for a teen retailer like Abercrombie. Furthermore, some experts are predicting a major trough in consumer spending after the post-holiday sales this year, giving even more reason to worry about its 2012 performance.

In addition, Abercrombie's rivals are desperate, and that desperation will likely lead to their own race to the bottom when it comes to discounting. American Eagle Outfitters (NYSE: AEO) recently lowered its fourth-quarter earnings guidance due to its excessive promotions, and Aeropostale (NYSE: ARO) recently reported a nasty 10% sales decline during the holiday season.

For a more reliable retail stock idea, consider Buckle (NYSE: BKE), which boasts years of positive sales growth (and comparable sales growth), steady gross margins, and consistently increasing annual earnings to speak for it. Buckle also pulled off a pretty incredible feat recently; its December comps increased by 8.9%. Or you can check out a retail stock idea you've probably never heard of: This free report, "The Motley Fool's Top Stock for 2012," is available absolutely free.

As for Abercrombie, though, there's plenty of ugliness left to come as this teen retailer dukes it out with its rivals. Investors should shed the shares before they get taken to the woodshed again.