By  on October 20, 2005

LOS ANGELES — American Eagle Outfitters wants to grow up with its core customer, creating a retail concept called Martin + Osa targeting 25- to 40-year-olds.

The brand, which takes its name from the 20th-century adventurers Martin and Osa Johnson, will focus on classic, denim and active-outdoor sportswear, and is to launch in fall 2006 with five stores. Company executives said each unit would be 5,000 to 7,000 square feet and carry women's and men's apparel as well as accessories and footwear.

"We feel we have a potential to do at least 300 stores in the next 10 years, and it could be a $1 billion opportunity," Martin + Osa president Ken Pilot said in an interview.

The concept has been in the works for about a year and the stores' debuts will be at better shopping centers, Pilot said. Executives didn't disclose locations or provide details about the merchandise or interior design of the stores.

But make no mistake, this isn't a test launch for American Eagle, which has a core shopper who is 15 to 25 years old, Pilot said.

"We're definitely not testing," he said. "We're building and we're focused."

American Eagle follows specialty retailers such as the Gap, Pacific Sunwear of California, Abercrombie & Fitch, Chico's, The Limited, Aéropostale and Polo Ralph Lauren, which have also started divisions catering to new audiences or different categories.

"It's the customer in transition," Pilot said. "From school to career, from being single to being [part of] a couple."

The vertical retailer, based in Warrendale, Pa., has had positive same-store sales for 21 consecutive months. American Eagle has succeeded at selling its own brand of preppy-inspired looks.

The company posted a September same-store sales increase of 13 percent compared with the year-ago period. Total sales for September increased 20.9 percent to a record $183.8 million, compared with $152 million for the same period the previous year. Sales for the 35 weeks ended Oct. 1 were up 28.6 percent to $1.39 billion, versus $1.08 billion for the comparable period last year.

American Eagle operates 786 stores in 50 states (and the District of Columbia and Puerto Rico), 71 stores in Canada and a Web business. Shares closed Wednesday at $23.37 in Nasdaq trading, up 63 cents. The 52-week range is $19.02 to $34.04.

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