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 has plans to grow the number of Aerie stores by 50, to reach about 400 by the end of 2021. Besides, the target is to have 500 to 600 Aerie locations in 2023.
Notably, Mike Mathias, CFO of the company said that it is a tale of two brands.
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 Covid pandemic.
It expects momentum to continue online, with digital sales at all of its brands growing in double digits.
Aerie is forecast to see a high-20 per cent revenue growth in its fourth-quarter, while its namesake American Eagle brand is forecast to see sales drop in the low double digits.
Its long-term financial target is to grow its Aerie business to US $ 2 billion, while working on improving profits at its namesake banner.
The rapid growth of the Aerie brand, which sells everything from bras and underwear to swimsuits and sweatpants, is making it a much stronger competitor to L Brands’ Victoria’s Secret business.
Sharing long-term financial outlook, the company informed that it targets revenue of approximately US $ 5.5 billion and operating income of US $ 550 million in fiscal 2023, with the operating margin expanding to 10 per cent.