Adding to a long list of specialty store spin-off casualties, American Eagle Outfitters Inc. Friday pulled the plug on its four-year-old 77kids children’s retail concept.
American Eagle plans to explore other options for the business, including a full or partial sale to a third party. The company, which is scheduled to report first-quarter results Wednesday, expects to take charges to reflect the discontinuation of the business primarily during the third and fourth quarters.
The company said 77kids, which has 22 stores and an online business at 77kids.com, racked up aftertax losses of $24 million on sales of $40 million during fiscal 2011. Its parent had net income of $151.7 million on sales of $3.16 billion last year. RELATED STORY: American Eagle Raises Guidance >>
Launched on the Internet in 2008 with a name derived from the 1977 founding of its parent company, 77kids was geared to children ages two to 10 and didn’t open brick-and-mortar stores until 2010. Martin + Osa, a contemporary offshoot geared to a more adult audience than the youth-oriented American Eagle brand, was closed in 2010, also after a four-year run.
“Although making this decision is disappointing, it is in the best interest of the company and our shareholders to prioritize and focus our efforts on businesses with the highest return potential,” said Robert Hanson, who joined American Eagle as chief executive officer in January from Levi Strauss & Co. “We thank the 77kids team for their hard work, passion and dedication.”
A spokeswoman said American Eagle is seeking other positions for the 90 corporate associates and 400 field personnel employed at 77kids.
The brand joins a long list of specialty store spin-offs that were unable to be sustained by their parent firms. While Gap Inc. saw Old Navy grow into its largest business and Abercrombie & Fitch and J. Crew continue to operate their Hollister and Madewell operations, respectively, Abercrombie closed its high-minded Ruehl concept in 2009 after a five-year run, Pacific Sunwear of California shuttered its D.e.m.o. and One Thousand Steps divisions in 2008 and Bebe Stores Inc. extinguished its PH8 nameplate in 2010.
AEO continues to operate its aerie intimates subbrand.
Separately on Friday, AEO said chief financial officer Joan Hilson is leaving the firm. Scott Hurd, vice president and controller, will serve as principal financial and accounting officer on an interim basis until a successor is appointed.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye