NEW YORK — Two weeks after being hired as a consultant at Wet Seal Inc., Michael Gold, who owns more than 400 retail stores in the U.S. and Canada, has purchased American Eagle Outfitters’ waning retail line, Bluenotes, for an undisclosed sum, American Eagle said in a statement Tuesday.
Thanks to the expected sale, Jim O’Donnell, chief executive officer of Warrendale, Pa.-based American Eagle, said in the statement that American Eagle is now “well-positioned to focus on the development of our next U.S. retail concept.
“Michael Gold has extensive retail experience in Canada, which we are confident will lead to future success. With the sale of Bluenotes, we can now devote our attention to expanding the AE brand in the U.S., Canada and worldwide,” O’Donnell added.
Gold was recently hired by hurting teen retailer Wet Seal, which failed to see its business turn around this summer, to lead merchandise and operational initiatives. He is the owner of YM Inc., a Toronto-based retailer.
The transaction with American Eagle, whereby a private company controlled by Gold will buy the Bluenotes apparel business, is set to close on Dec. 5 and is subject to regulatory approvals. American Eagle said it will take an 8- to 11-cent-a-share loss in the fourth quarter related to Bluenotes.
Bluenotes is a chain of 109 stores in Canada, offering mainly denim to 12- to 22-year-olds.
In the first nine months of this fiscal year, Bluenotes had sales of $60 million, versus $57.9 million last year, helped, the company said, by the strengthening Canadian dollar. Same-store sales declined 1 percent, excluding foreign currency impacts.
In its latest quarter, American Eagle earnings increased 220 percent to $58 million, while total revenues were up 34.7 percent to $503.4 million.
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