The company is based in Pittsburgh, Pennsylvania, America, and has been a popular brand among Americans. The company which I am talking about has its global presence which provides affordable clothing for every customer. The company has a brand named Aerie. Yes, I am talking about American Eagle. American Eagle has been running successfully for over 45 years and the total asset of the company is US$3.4 billion. The number of employees is 37,000 as of 2021. But The fashion retail company has been hugely affected during the pandemic where the sales dropped by 79 %. The revenue further dropped to a $ 640 billion loss.
AEO has outperformed during the pandemic which has been possible through distribution modes and promotion with social media platforms. The company had also made changes in its supply chains for the evaluation of its store fleets. Aerie had achieved to grow despite the pandemic effects in 2020. The airbrush-free campaigns, on the other hand, facilitate celebrating all bodies in AEO. Mainly the loungewear line is committed to providing body-type clothes and this is done by featuring attractive models. Therefore, the models who have joined the campaign are Olympic gymnast Aly Raisman, singer Rachel Platten, Iskra Lawrence, and activist Yara Shahidi. They have been chosen for the swimwear, intimates, and apparel campaigns of the brand. It is the idea of body positivity that has been spread in the program. These special people from their respective fields have been chosen because Aerie wants them to voice their own influential stories and a self-made success. Being strong, and confident about one’s skin is the main motivation for the promotion of AerieREAL The first quarter of 2020 earnings has been withdrawn as a response to the pandemic. The material adverse effect is the one aspect that could be issued in the company and it could also affect the financial results of the company to a great degree. The shares can plunge as well for this company as they have lost their reputation with the investors. The company is not giving its investors enough reasons to bye their stocks as the company expenses are rising at a high pace. The shares of the company have scored only 15 % during the time of the pandemic and this is the main reason why they are less likely to attract customers and investors in the future. The week holiday quarter sales are one of the key examples of the company which is issued during the period of a pandemic. The shoppers have already shifted to specialty apparel chains as a response to the bad performance in sales. Furthermore, Abercrombie & Fitch (ANF) and rival Gap Inc are competing to a great degree and taking the opportunity as a response. The retail climate of American Eagle particularly in the malls is tragic. For instance, the pace at which traffic in the stores is generated is quite slow. The investors of American Eagle who have been seriously damaged have claimed that the low single-digit percentage is the main issue that could be less profitable for them. In the fourth quarter of the year, the company scored this percentage and this is the reason why fewer investors’ engagement can be considered as one of the key risks for the American Eagle. On the other hand, in the year 2021, the revenue of the company earned 3.1 billion dollars which are lower as compared to the 2016 revenue. In the year 2016, the revenue of the company was 3.2 billion dollars. The annual growth rate has increased to only 4 % which is a lot lesser in terms of actual profitability standards. This ratio of sales and revenue standards of the company may lower brand loyalty in all its stores. The slowdown in revenue has already lowered brand loyalty in the US teen apparel market. The other retail giants like Gap Inc and H & M can increase the broader set of product ranges. Since people with a trendy and choosy fashion mindset shift quickly to products that are affordable and relevant, American Eagle can face a tremendous level of competition. The company level has also shrunk from a rate of 89 % in 2016 to around 81% in the year 2019. This ratio can potentially increase to a tragic end if no such recovery decisions are implemented. The operation consultant, named Pam Forster claimed the company was uncool and also an embarrassing place to shop. American Eagle and its logo-centric clothing design are the reason why its customer demand is falling apart. The inventory of logo-heavy clothes is hard to shed from the company investments. This is the reason why the company is unable to excel in its international footprints. The UK for example has been one of the examples where they fail to excel. The digital chain of this brand segment of American Eagle has scored detrimentally in in-store sales. The label of the main section, AEO is quite bad in sales as compared to the brand Aerie. On the other hand, some companies catch the market trend pretty fast than the American Eagle. The companies which come under this list are Inditex and Hennes & Mauritz. Amazon for example has outsmarted the market of online mediums and this can be the biggest threat for American eagle in the future as well.
Specialty of AE
It is quite evident that the Aerie products are high in demand but which are the exact ones? These specific ones are Aerie leggings, lingerie, bralettes, underwear, and bras that shoppers like the most. Sales growth in jeans and bottoms for both women and men have been surprisingly attractive for AE. For instance, in the first fiscal of 2018 sales with regards to jeans have reached 1 billion dollars. The Aerie brand’s main motive is to launch the body-positive idea with new styles of various sizes at affordable prices. In the Role model campaign of the brand, Ali Stroker, Lana Condor, Beanie Feldstein and Hari Nef have been joined.
Furthermore, for spring 2019, Emmy-winning actress Samira Wiley, body-positive activist Jameela Jamil, YouTuber Molly Burk, and para-snowboarder Brenna Huckaby have been joined in the Aerie campaign. Aerie has provided clothes’ for women in the sizes of 00 to 24. On the other hand, Men’s denim is available as well in sizes 26 to 48. In the fall 19 campaign, Ireland Baldwin, Kathryn Gallaghar, Corrine Foxx. Nina Agdal, Sailor Brinkley Cook, Denise Bidot, and Kathryn Bidot have joined. AE x Young Money Collab And Fall ’19 Campaign.
Overseas expansion
American Eagle has also partnered with Pacifica Lifestyle to get a brand presence in Thailand. The brand expansion into overseas markets is the brand strategy to eschew tight competition in the home market. Apart from Thailand, they have their markets in Canada, China, Mexico, and Hong Kong. They have licensed stores as well in around 12 countries comprising of United Arab Emirates, Russian Federation, Kuwait, Lebanon, Kingdom of Saudi Arabia, Jordan, Egypt, Morocco, Japan, Israel, Philippines, and Poland.
New changes
The customer temperature measurement process has been newly integrated into the stores of American Eagle. They have done it by investing in infrared machines and curbside pickup. Due to the virus outbreak, AE introduced the “welcome tables” with disposable masks and bottles of hand sanitizer. The customer’s shoe soles are cleaned by their sticky blue mats as well. The purchase can be done with the plexiglass divider and anyone can take the receipt from the printer. These are all indicators for the customer that things are different now. To limit excess customers in the stores, they have used the assistance of their application. The company mobile app is organized in such a manner that it will notify the customers when it is their turn to the shop. At the same time, the new protocols have taught the employees how to fold jeans and T-shirts. The trail room idea has been replaced by AI technology where the employee gets informed by the shopper’s selection of products. When the shoppers select a product by scanning it or choosing it, immediately it informs the employee to check the store’s availability of it. The AI is made to recommend the customer about products as well.
Give more focus on the Aerie brand and European brand expansion
The segments of the business which are more relevant from the viewpoint of the customers can be taken seriously. This response of relevant fashion is more accurate for American Eagle because they have a strength in their new brand called Aerie. The revenue of this segment of the brand has increased from 397 million dollars in 2016 to almost 819 million dollars in the financial year of 2019. While all the growth of the company labels has decreased to a great degree, Aerie’s label has remained one of the strong parts of the business. This label is regarded as one of the important business models of American Eagle. Furthermore, since international sales and acquisition is very hard for the company to acquire, they must leave the logocentric approach and try to exploit the European markets. Investing more money in business acquisition in the overseas market can be a great option for the company. In the body positive marketing campaign of Victoria’s Secret, the women’s clothing wear brand of American Eagle has increased a great sales growth. This segment of the Aerie product line can increase the stock price rate in the future.
