AE Celebrates Move to NYSE, Talks Growth

Spring break came early to the New York Stock Exchange on Thursday, courtesy of American Eagle Outfitters.

Spring break came early to the New York Stock Exchange on Thursday, courtesy of American Eagle Outfitters.

The facade of the NYSE on Broad Street in lower Manhattan was covered with a banner featuring an image of young men and women frolicking in the sun from American Eagle’s new ad campaign. A similar scene came to life in a tent outside the exchange building, where “boys” and “girls,” as the company calls its 15- to 25-year-old customers, played miniature golf, soccer and Hacky Sack, wearing clothes from the spring break collection.

The hoopla celebrated Ameri­can Eagle’s move from the Nas­daq to the NYSE. Chief executive officer Jim O’Donnell, along with Susan McGalla, president and chief merchandising officer of the American Eagle brand; chairman Jay Schottenstein, and vice chairman Roger Markfield helped ring the bell to signal the start of the trading day. The stock, which trades under the symbol AEO, closed at $30.25.

McGalla said in an interview that American Eagle’s marketing budget is about 2 percent of sales, which totaled $2.8 billion last year, but she wouldn’t reveal the cost of the spring break campaign, which includes events in Acapulco and Cancun, such as performances by Fergie and Ludacris. “We’ve taken our ownership of spring break up this year,” McGalla said, adding that American Eagle provided themed shower curtains and window stickers to hotels. The company has even trademarked the phrase “winter break” for the fourth quarter.

McGalla described the move to the NYSE as a “milestone. Now we have a portfolio of brands.” The company’s goal is to reach $10 billion in sales.

American Eagle’s aerie subbrand is slated for accelerated growth with an eye toward becoming a full-fledged brand. In the fall, aerie will launch a personal care line. The subbrand recently introduced the Paige push-up bra, and more bras are scheduled to bow this year. “We’re launching an extension of dormwear for aerie,” McGalla said. “It will address something we’re not addressing today. The whole positioning of aerie is sweetly sexy. This is the intimate side of her, it’s the first layer. This [new line] will take her outside the dorm room.”

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When aerie opens stand-alone units in malls there will be some overlap with aerie shop-in-shops in American Eagle stores. The company is developing new product categories for American Eagle so it’s ready to reclaim the aerie in-store departments.

The fledgling Martin + Osa chain is being repositioned, McGalla acknowledged. “The definition of the brand was too narrow in the beginning,” she said. “The sport sensibility was taken too literally. There’s an inspiration from sport. The brand is about women’s and men’s lifestyle weekend wear. We want to adjust our assortments so the brand addresses more sides of their lifestyle” including clothing to wear out in the evening.

AE’s third brand in development will complement the existing portfolio. “It needs to be synergistic,” McGalla said. Asked about its target demographic, she said: “It’s not about age. It’s an attitude and a lifestyle.”