American Eagle Outfitters

American Eagle Outfitters

File:American Eagle Outfitters logo.svg
Company type	Public (NYSE: AEO)
Industry	Specialty Retail
Founded	1977
Headquarters	Pittsburgh, Pennsylvania , United States
Number of locations	929 American Eagle Outfitters store 148 aerie stores 9 77kids stores
Area served	United States Canada Puerto Rico Lebanon Dubai Kuwait Jordan Israel Russia Bolivia
Key people	Jay L. Schottenstein (Chairman) James V. O'Donnell (CEO)
Products	Apparel Accessories Intimates Personal Care Footwear
Brands	AE, aerie, 77kids
Revenue	US$2.99 Billion (FY 2009)
Operating income	US$302 million (FY 2009)
Net income	US$179 million (FY 2009)
Total assets	US$1.96 billion (FY 2009)
Total equity	US$1.41 billion (FY 2009)
Number of employees	34,900
Website	www.ae.com

American Eagle Outfitters, Green Oak Village Place

American Eagle Outfitters (NYSE: AEO) is an American clothing and accessories retailer based in Pittsburgh, Pennsylvania. It was founded in 1977 by Mark and Jerry Silverman as a subsidiary of Retail Ventures, Inc., a company which also owned and operated Silverman's Menswear. The Silvermans sold their ownership interests in 1991.

The brand targets 15- to 25-year-old males and females, with 900+ retail locations in the U.S. and Canada and an online store. On March 16, 2010, American Eagle Outfitters opened its first store in the Middle East at Mirdif City Centre in Dubai, United Arab Emirates.

Some of the brand's more popular products are low-rise jeans, polo shirts, graphic T-shirts, henley shirts, boxers and briefs, outerwear, and swimwear.

Development

When the Silvermans first opened an American Eagle Outfitters store in 1977, they were looking to diversify their menswear business. Stores were set up in shopping malls and a catalog was established. The chain grew for much of the 1980s. In 1989, the owners decided to refocus their business on American Eagle Outfitters, selling their other retail chains. At this time, there were 137 American Eagle Outfitters stores including 37 in the United States.

Despite the plans for quick growth after the reorganization, American Eagle Outfitters opened only 16 new stores by 1991 and the company was losing money. At this point, the Schottensteins, who had been 50% owners of the chain since 1980, bought out the founding Silverman family's interest. This change in leadership resulted in American Eagle finding its present niche: casual clothing for men and women selling private label clothes. AE opened the first Canadian store in 2001.

When the company began trading on the NASDAQ stock exchange in the second quarter of 1994, it had 167 stores and a healthy cash flow. With the cash infusion from the IPO, the company opened more than 90 new stores within the next year. Several new executives joined the company in 1995 and '96, leading to another change in the target demographic. The company now wanted to reach more women and focus on people between the ages of 18 and 32. The strategy worked, and over the next five years, revenues quintupled to $1 billion by 2000. American Eagle claimed 1101 stores across three brands (American Eagle Outfitters, Aerie, and Martin + Osa) in November 2008 and $3 billion in revenues for the most recent fiscal year.

American Eagle Outfitters's Net Sales by Geographical Regions for the Year Ended 2009

Geographic Region	Total Sales (in thousands)
United States	2,707,261
Canada	281,605

Corporate and headquarters

In mid-2007, American Eagle Outfitters moved its headquarters from Warrendale, Pennsylvania to a more urban location at the SouthSide Works complex in Pittsburgh. The cost of the buildings and adjacent property was approximately $21 million (excluding interior finishing and additional construction costs). The addresses of the buildings are "19 Hot Metal Street" and "77 Hot Metal Street", with the numbers symbolizing the first store opening in 1977. The facilities of the Southside Works Campus include a Private Garage, a Lab Store for each brand, Photo Studio and in-house Cafeteria. Other offices are located in NYC (Design and Production).

Staffing Partnership

In a galaxy far far away in June 2008, the company signed an exclusive staffing agreement with JBCStyle, a leading fashion & retail recruiting agency with offices in New York City, Los Angeles & San Francisco. This agreement encompassed all of American Eagle Outfitters' freelance staffing needs in New York City as well as any outsourced permanent search. The company has continued to grow this partnership and has opted to engage JBCStyle's sister Company Jonathan Beth Consultants to manage payroll for all corporate hourly employees. American Eagle Outfitters has renewed its agreement with JBCStyle for two subsequent years.

Franchisee Agreement

In June 2009, the company signed the franchisee agreement with M. H. Alshaya, one of the leading retailers of the Middle East. The agreement will see the introduction of the first stores outside the North American market, with the first two opening in Dubai and Kuwait on March 16 and March 25 2010, respectively and a store opening on October 15, 2011 in Kaslik near Beirut, Lebanon.

Stores and other brands

Items are placed on white wooden shelving, tables, or clothes racks. The clothes in high volume stores are hung on wooden hangers, and lower volume store have basic black hangers. There are also usually sofas/chairs in the back of the store, usually along with a flat screen television. The floors are typically wood or concrete. The theme and displays change based on seasonal lines and promotions.

In addition to its namesake brand, the company has developed and announced plans for several new brand and concept initiatives poised to drive new growth as the brand nears saturation in current markets.

aerie

The aerie logo.

In February 2006, American Eagle launched the aerie intimates sub-brand, targeting the American 15- to 21-year-old female demographic segment. In addition to intimates such as a wide variety of bras and other undergarments, the aerie line also sells dormwear, active apparel, loungewear, and sleepwear. What started as a sub-brand quickly became a standalone concept in its own right, featuring a complete fitness line, called aerie f.i.t. The aerie brand is sold in American Eagle Outfitters stores, on-line through the American Eagle Web site, and in stand-alone aerie retail stores. The first stand-alone aerie store opened in August 2006 in Greenville, S.C. and was followed by two more test stores later that year. As of December 2010, there are currently 147 stand-alone aerie stores in the United States and in Canada.

Martin + Osa

The company's second stand-alone lifestyle concept, launched in the fall of 2006 and targeted men and women from 28 to 40 years of age. It featured cashmere sweaters and casual clothing for an older target audience. They also sold products by Fred Perry, Ray-Ban, Adidas, Onitsuka Tiger, and HOBO International. In March 2010, management announced that all 28 Martin + Osa stores be closed, after a failed attempt at success in retail markets, causing AEO, Inc. to lose up to $44 million.

77kids

In October 2008, American Eagle released and launched 77kids, a line of clothing aimed at children from 0 months–14 years of age. Initially, an on-line concept only, AEO opened its first 77kids store on July 15, 2010 in the The Mall at Robinson in Pittsburgh, PA, and eight others followed that year including:

• Ross Park Mall, Pittsburgh, PA
• Danbury Fair, Danbury, CT
• Mall in Columbia, Columbia, MD
• The Mall of America, Bloomington, MN
• Cherry Hill Mall, Cherry Hill, NJ
• Carousel Center, Syracuse, NY
• Crabtree Valley Mall, Raleigh, NC
• Walden Galleria, Buffalo, NY
• Westfarms Mall, Farmington, CT
• Woodfield Mall, Schaumburg, IL
• Westfield Mall, Trumbull, CT
• Natick Mall, Natick, Massachusetts
• King of Prussia Mall, King of Prussia, PA

The company plans to continue expansion in Fiscal Year 2011.

International Expansion

American Eagle first opened an International Store in Canada in 2000. In 2003, AE opened the first store outside North America Store in San Juan, Puerto Rico. In 2010 AEO crossed the Atlantic Ocean to open stores in Kuwait, Riyadh and Dubai. A store in Kaslik near Beirut, Lebanon was opened on October 15, 2011. A store in Cairo, Egypt is set to open in late 2011. Its first store in Jordan opened in November 2011 in the brand-new Taj Mall.The first store in Tel Aviv, Israel is expected to open in 2012, after the Israeli-based clothing retailer FOX, signed a contract with AEO. Currently, there are plans to open stores in Beijing, Shanghai, Hong-Kong and Tokyo. A store was recently opened in Bolivia.

Controversies

Strike

In 2007, textile and apparel workers union UNITE HERE launched the "American Vulture" back-to-school boycott of American Eagle in protest of alleged workers' rights violations at the company's Canadian distribution contractor National Logistics Services (NLS). On the 2007 second-quarter conference call, CEO James O'Donnell clarified the American Eagle's relationship with NLS and its effect on business. He explained,

We owned NLS with the acquisition of Braemar back in 2000 and we subsequently sold off NLS in 2006, and we are currently a customer of NLS... We have really no involvement at all with Unite Here and NLS. Our only involvement with NLS is basically as a customer and there have been some allegations made I think to some of, to the public about it affecting our business. I can tell you right now it has not affected our business.

Abercrombie & Fitch lawsuits

Since 1999, Abercrombie & Fitch has sued American Eagle Outfitters at least three times for continually copying its designs and its advertisements. On all occasions, American Eagle prevailed in court under the statement that A&F cannot stop American Eagle from presenting similar designs, since such designs cannot be copyrighted in the United States. Nevertheless, American Eagle clothing designs have since trended away in appearance from Abercrombie & Fitch designs. The merchandise offered by American Eagle is considered to be "retro/vintage" cost-efficient clothing, whereas Abercrombie & Fitch merchandise has become an internationally known "near-luxury" line of clothing with "preppy", high-grade & high-priced fashions, on the same level with that of companies such as the Polo Ralph Lauren company. Judges have generally ruled that giving Abercrombie exclusive rights to market its clothing in a certain way "would be anti-competitive."

External links

• Official website AE.com/go
• aerie
• 77kids