American Eagle Industry Analysis

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Management 471 Spring 2012 American Eagle Outfitters Inc. Industry Analysis Randy Frazier, Erin Jones, and Shane Vassallo Management 471 Spring 2012 American Eagle Outfitters Inc. Industry Analysis Randy Frazier, Erin Jones, and Shane Vassallo HISTORY: American Eagle Outfitters was founded by Mark & Jerry Silverman as a subsidiary of Retail Ventures, Inc., which operated ‘Silverman’s Menswear’. The brothers, being very business orientated people, eventually sold their other businesses and decided to focus strictly on AEO. Up until 1990, the company focused on private-label merchandise, but in 1991, Schottensteins, a 50% owner of AEO, bought out the remaining 50% interest from the Silverman family, and AEO eventually went public by 1994. After going public, the company continued to grow significantly over the next few years in both its number of stores and in revenue. By 1998, American Eagle launched its direct-to-consumer website, www.ae.com. Then, in 2000, American Eagle opened its 500th store, where they crossed the borders and expanded into Canada. With the opening of AEO’s 1st Canadian store, the company was able to generate a record net income of $105.5 million during the same year. Over the next few years, AEO continued to maintain steady growth within the US and Canada, and by 2006, the retail company was ranked #1 in jean sales by 15-25 year olds above all other specialty retailers in the industry. They were also ranked #1 in brands that college students could not live without. Because of the early success of American Eagle, the company decided it wanted to try and target a larger audience by incorporating new brands that would attract other age groups since the company up until this point was solely producing apparel for men and women ages 15-25. They opened 2 new brands in 2006. ‘M+O’ (Martin and Osa), which targeted 25-40 year

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