The Silverman family first founded American Eagle Outfitters in 1977. They operated specialty clothing stores under the name Retail Ventures. In 1980 the Silverman’s encountered financial troubles when the Schottenstein family bought out 50% of the Retail Ventures. In 1991 the Schottenstein family bought the rest of Retail Ventures and opened 153 American Eagle Outfitters. By late 2000 the company had introduced 46 new stores in Canada. American Eagle had approximately $2 million in annual sales in 2003 and now operates over 800 stores in the United States and Canada (http://www.hoovers.com/american-eagle-outfitters/--ID__17231--/free-co-factsheet.xhtml).
American Eagle Outfitters is a fairly new company but they are doing extremely well because they have a clear grasp of who their target market is. They posses a fresh new hip look with great quality clothing at a reasonable price for consumers (http://www.prism.gatech.edu/~gte201w/aeostrat.html). This is one of the main reasons why teenagers and young adults are so attracted to the company. American Eagle is aiming to appeal not only to the targeted 20 year old but also consumers between the ages of 16 and 34 years old. This will widen the gap between their major competitors because they are trying to appeal to more segments than just one. American Eagle seeks to be assessable, fashion orientated, and has a strong value proposition, which has allowed the company to thrive and take shares from competitors over the past five years. Not only is their clothing line very comfortable, bold and fresh, the store layout and atmosphere is also major key factors in American Eagle’s success over the recent years. AE also has a strong competitive advantage because of their short lead times and their ability to position themselves in high-visibility, high-profile locations in key markets. American Eagle’s cycle time is about five months from design to delivery, versus about nine months for The Gap and six months for Abercrombie. AEOS minimizes lead times by maintaining sourcing relationships with a few key manufacturers and producing much of the merchandise in North America, versus 9% for The Gap and a minimal amount for Abercrombie. AEOS has the ability to quick-source some of its simpler product categories in order to react quickly to sales trends. (http...
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...ould sustain higher price points and thus could lead to margin improvement.
The downside to this solution is customers may not like the professional line and therefore American Eagle will not make any profit. Also, if the professional line is too pricy the customer might seek another retail location.
Recommended Solution, Justification, and Course of Action
I believe American Eagle Outfitters should try to venture into the international market to increase their sales and become more known worldwide. It would benefit American Eagle to become an international company also to broaden their target market and customer loyalty. Introducing a business line in their company can also benefit American Eagle since some of their competitors have not entered into that arena as of yet. If American Eagle delivers a strong marketing campaign and increases promotion of their company this would definitely benefit the company in the ling run against the changing market.
• American Eagle Outfitters. 7 Apr. 2005 http://www.ae.com.
• American Eagle Outfitters Strategy Analysis . 7 Apr. 2005
• Bieseda, Alex. American Eagle Outfitters, Inc. . 2005. 7 Apr.
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