Plans For American Eagle Outfitters Location Closings Throughout 2023

Joel Eisenberg

200-250 store closures over a three-year period were announced in January of 2021. Current financials reflect a new round of permanent closings is not off the books.

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American Eagle OutfittersShutterstock

Author’s Note

This article is based on corporate postings and accredited media reports. Linked information within this article is attributed to the following outlets: Wikipedia.org, ScrapeHero.com, and Investors.AE.com.

Introduction

Wikipedia features a comprehensive overview of the American Eagle Outfitters chain: American Eagle Outfitters, Inc., also known as American Eagle, is an American lifestyle, clothing, and accessories retailer headquartered at SouthSide Works in Pittsburgh, Pennsylvania. It was founded in 1977 by brothers Jerry and Mark Silverman as a subsidiary of Retail Ventures, Inc., a company that also owned and operated Silverman's Menswear. The Silvermans sold their ownership interests in 1991 to Jacob Price of Knoxville, Tennessee. American Eagle Outfitters is also the parent company of Aerie. The brand targets male and female university and high school students, although older adults also wear the brand.

For the sake of perspective, the Wikipedia page also mentions the company operated 901 American Eagle stores as of January, 2021, being representative of the page’s last update.

According to ScrapeHero.com, however, current numbers show a sharp decrease: There are 768 American Eagle Outfitters locations in the United States as of June 23, 2022. The state with the most number of American Eagle Outfitters locations in the US is Texas, with 60 locations, which is 7% of all American Eagle Outfitters locations in America.

More such decreases are coming. In January, 2021, the company reported a closure of 200-250 locations “over the next three years.” See BestLifeOnline.com article from that period, ”This Popular Clothing Store is Closing at Least 200 Locations,” which states: We currently have 880 stores between the U.S. and Canada. We see that getting down to somewhere between 600 and 700 over the next three years," said Michael Rempell, executive vice president and chief operations officer of American Eagle Outfitters, told Women's Wear Daily. "But we're confident that we can transfer sales from closed stores into other stores or online, continue to acquire new customers and make the American Eagle brand more profitable over time."

Where does business stand today?

Let us explore further.

American Eagle Outfitters, 2022

The American Eagle Outfitters investor website posted first-quarter 2022 earnings, which the company considers mixed but promising. As excerpted from their May 22 press release: “The first quarter proved challenging, with demand well below our expectations, pressuring operating profit. Comparisons from an extraordinary spring last year driven by stimulus payments and pent-up customer demand, were compounded by rising inflation, higher gas prices and a stronger than anticipated pivot to other discretionary categories. In hindsight, our plans entering the year were too optimistic. We are taking swift measures to adjust our inventory and expense base with a firm goal of entering the second half better aligned with demand trends,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

I mentioned, though, that word was mixed. Other metrics are more positive. Again, from the official company report:

  • Total net revenue increased $20 million, or 2% to $1.055 billion, compared to $1.035 billion in the first quarter of 2021. Our supply chain acquisitions contributed approximately 3 percentage points to revenue growth.
  • Aerie revenue of $322 million rose 8% reflecting a 27% 3-year revenue CAGR. American Eagle revenue of $686 million declined 6% versus first quarter 2021 reflecting a -2% 3-year revenue CAGR.
  • Consolidated store revenue increased 2%. Total digital revenue declined 6%. Compared to pre-pandemic first quarter 2019, store revenue increased 1% and digital revenue increased 48%.
  • Gross profit of $388 million declined 11% from $436 million in the first quarter of 2021 and reflected a gross margin rate of 36.8% compared to 42.2% last year. Higher freight costs impacted the gross margin by approximately 340 basis points and our supply chain business had a 120 basis point impact as we integrate and ramp up the platform. Delivery and rent also increased, offset slightly by lower incentive compensation accruals.

Again, positives and negatives are in that mix, and the company will continue to strategize moving forward.

Conclusion

Business for American Eagle Outfitters is overall stronger today, per the majority of business metrics, following the permanent closures of predominantly mall-located stores.

Those closures are presently planned to continue to the end of 2023, and word is the company is open to further closures based on performance issues, hence COO Rempell’s words of possibly leaving 600 stores in operation from the then-high of 880 locations.

The number is higher than the 200-250 stated, and based on Quarter One reports of the current calendar year is not off the books.

I will update my readers here, on NewsBreak, in the event of further formal company word on that matter.

Thank you for reading.

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I am an award-winning author, screenwriter for film and television, and producer. My mission on News Break is to share socially important perspectives on both culture and pop-culture. Member of PEN America, and the WGA.

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