The economic effects of the COVID pandemic are continuing to wreak havoc on some of the biggest names in retail, and the latest one to suffer is American Eagle. According to CNBC, during a meeting on Jan. 21, American Eagle Outfitters Chief Financial Officer Mike Mathias told investors the company planned to close 200 to 250 American Eagle locations. For more information on the American Eagle closures, read on, and to see which chain is shutting down for good, check out This Beloved Department Store Is Closing All Its Locations.
Most of the American Eagles that are closing will be in malls.
There are currently 880 American Eagle stores, but about a quarter of them will be shutting down, Mathias said. It's too soon to know which American Eagles will be shutting their doors, but get ready to say goodbye to hundreds of them in malls across the country, where decreased foot traffic has cratered revenue. And for another store that's leaving malls behind, check out This Iconic Clothing Brand Is Closing Over 200 Stores.
The American Eagle stores will be closing over the next three years.
"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." And for more brands that may not survive, check out These 2 Beloved Department Stores Are "Slowly, Quietly Dying."
But expect more Aerie stores to pop up.
While the chain seeks to shutter American Eagle stores, it plans to increase the number of Aerie stores, a subset of American Eagle that's mainly intimate apparel, loungewear, and activewear. According to CNBC, the company plans for Aerie's locations to grow from 50 to about 400 by the end of the year and then up to as many as 600 by the end of 2023. All of these changes are part of American Eagle's "Real Power. Real Growth" plan. And for more regular retail updates, sign up for our daily newsletter.
The sister brand has been outdoing American Eagle for a long time.
Aerie has been outpacing its predecessor for some time now. "It's a tale of two brands," Mathias said on the call. Although the pandemic has contributed to American Eagle's dropping sales, Aerie was already on track to eclipse the brand before COVID was in the picture. In Dec. 2019, Forbes named Aerie one of the fastest-growing apparel brands and predicted it'd soon be pivotal to the company's long-term success.
American Eagle expects fourth-quarter revenue to drop into the low-single digits due to decreased brick-and-mortar sales and minimal mall traffic. However, the company expects Aerie's fourth-quarter revenue to be in the high-20 percent range. And for another big change at America's most beloved wholesaler, check out Costco Is Removing This From All of Its Stores in February.