US-based leading apparel retailer American Eagle is planning to shut around 200 to 250 stores, mostly mall-based locations. The company currently has around 880 stores. These store closures will take place in next 2 to 3 years. At the same time, the retailer plans to grow the number of Aerie stores by 50, to reach about 400 by the end of 2021. The target is to have 500 to 600 Aerie locations by 2023.
The company is expecting its fourth-quarter revenue to decrease in the low-single digits –driven by a drop in bricks-and-mortar sales due to weak mall traffic during the pandemic. It expects momentum to continue online, with digital sales at all of its brands growing in double digits. Aerie is forecasted to see a high 20 per cent revenue growth in fourth-quarter, while its namesake American Eagle is forecasted to see sales drop in low double digits.
Its long-term financial target is to grow Aerie business to $2 billion, while improving profits in namesake banner. The rapid growth of Aerie, which sells everything from bras and underwear to swimsuits and sweatpants, is emerging as a strong competition to L Brands’ Victoria’s Secret business.
Sharing long-term financial outlook, the company informed it targets revenue of approximately $5.5 billion and operating income of $550 million in fiscal 2023, with the operating margin expanding to 10 per cent.
