After the launch of its latest "grown-up" brand, Martin + Osa, and intimates sub-brand, aerie, American Eagle Outfitters is devising the next concept to add to its portfolio.
At a Susquehanna International Group conference last month, the teen specialty retailer said plans for a third concept are on the drawing board. While executives did not reveal the direction of this new brand or when it would be launched, analysts agree another concept is necessary for the success of the company's long-term growth.
It will take about two to three year's before American Eagle can break even from its Martin + Osa launch and start seeing a profit, said Christine Chen, senior research analyst at Pacific Growth Equities.
"They need to get a new concept incubated sooner rather than later. Martin + Osa was launched a little later than it should have been, and American Eagle wants to reap the benefits of a third concept earlier this time," she said.
It can take years before a brand really becomes a success, as seen with their flagship, said Margaret Mager, analyst at Goldman Sachs.
But with a positive balance sheet and steady cash flow, now is the right time to start exploring an expansion of the brand. "American Eagle's comps are reaching saturation point," said Eric Beder, senior vice president at Brean Murray, Carret & Co. "Store growth has been in the low single digits and their second concept [Martin + Osa] won't make a difference for a few years."
Analysts have a few guesses as to what's next for American Eagle, with possibilities including a children's line, similar to Abercrombie & Fitch's abercrombie, or an extension of the intimate collection into a separate women's lingerie store. Another option is an accessories brand targeting the middle-class teen and contemporary shopper.
A grooming moment between @tanfrance and @antoni last night at the The LGBT Community Center Trailblazer Awards honoring Anna Wintour, Ricky Martin and more. See more photos at WWD.com #wwdeye (📷: @lexieblacklock)
“It was a very surreal feeling. It wasn’t like we were in the studio together coming up with it — it’s more like he discovered it and loved it. I didn’t let myself get my hopes up, but then it happened it was very exciting,” said singer-songwriter @nombe on discovering that @pharrell would be using his song, “Cant Catch Me” on his HBO documentary series “Outpost.” The German-born singer — named Noah MacBeth — talked to WWD about feminism, using art as a platform for political expression and personal style. Read more on WWD.com #wwdeye (📷: @jilliansollazzo)
This season, denim is going west – in influence. Brands like @fathersdaughterla (pictured here), @tommyhilfiger Jeans, @levis and more are opting for raw, top-stitching styles. (Styled by @thealexbadia; 📷: @ryanplett)
20-year-old British singer @jorjasmith_ made her debut at Coachella last weekend. We caught up with her and talked about her love for Amy Winehouse, working with Kendrick Lamar on the “Black Panther” album and her fashion philosophy. Read the interview on WWD.com #wwdeye (📷: @katiedaisyla)
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)