By  on November 15, 2006

Keeping a finger on the pulse of the ever-changing teen customer has helped American Eagle Outfitters achieve an enviable string of over 30 months of positive comp-store sales gains.

Susan McGalla, president and chief merchandising officer for the $2 billion specialty store chain, said this year's summit theme, "Reengineering Retail," was very much a hallmark of her company and one of the primary reasons for its success.

"In our point of view," she said, "reengineering is constant. It never ends. You'll hear me speak interchangeably about innovation, which happens to be one of our five values that we take very seriously at American Eagle. As an industry, we keep pushing ourselves to think big and long term, and that takes innovation."

McGalla said that as "a growth-oriented company," AEO is not afraid to look out as far as 2010 or even 2020. That long-term view toward growth is one of the reasons the retailer this year launched two new concepts, Aerie and Martin & Osa, and has plans for a third, undisclosed concept on the drawing board. "It's been a momentous year for our company. We're no longer just a brand and a company. We've grown up into a corporation," she said.

Juggling these various businesses requires AEO to have a solid understanding of its core competencies. "We know what we're good at, we know what we're not good at. We know what we know, we know what we don't know," she said.

And viewing everything through that "filter" is essential for the company as it ponders its future growth.

"We're $2 billion and looking at approaching $3 billion, and how do we get to $10 billion? Getting big means staying small in the right ways," she said.

As AEO continues to grow, McGalla said it is paramount to maintain "a maniacal focus on the customer. When you walk into the door everyday, you have to turn into that 20-year-old mind-set." Servicing this demographic is a "slippery slope," she acknowledged. "They change their minds all the time. They're smarter, quicker, faster, more sophisticated than they've ever been." And that requires middle management to be "entrepreneurial" in order to keep up.

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