Seeking to capitalize on China’s consumer spending boom and a perceived void in the teen market, American Eagle Outfitters Inc. said Wednesday that it will open stores in Hong Kong and China through a franchise agreement with Dickson Concepts (International) Ltd., which operates more than 400 stores in Asia.
American Eagle will unveil three stores in Hong Kong, Beijing and Shanghai in early 2011. “There is significant appetite for the American Eagle Outfitters brand internationally,” said Jim O’Donnell, chief executive officer of American Eagle Outfitters.
“There is a burgeoning demand for trendy young fashion in Asia,” said Dickson Poon, group executive chairman of Dickson Concepts. “I am very confident that American Eagle Outfitters will achieve the same level of phenomenal success in Asia as in its home market of North America.”
American Eagle will offer the brand’s complete seasonal assortments, intimates and dormwear from the aerie sub-brand. The only concession to consumers in the region will involve size. “We won’t change the assortment, but we may alter some of the styling and colors,” said Christopher Fiore, executive vice president of AEO International. “Ninety-five percent of the stores will look like an American Eagle store in the U.S.”
The U.S. retailer will provide merchandising and marketing input, and Dickson Concepts will handle all operational functions.
Fiore declined to say how many stores American Eagle could ultimately open but said the company’s 20-year, multistore agreement with Dickson Concepts represents a significant commitment. “The countries are developing from a retail perspective,” he said. “We’ll look at every market. There are secondary cities we would pursue.”
American Eagle is new to the international game, having opened its first stores outside the U.S. in March in Kuwait and Dubai. “We got very good feedback from the Middle East,” Fiore said. “We learned that the brand can travel and that the brand resonates with customers outside of North America. We’ll have enough locations in [the Middle East] in the next few years to be well on our way to a major rollout.”
In terms of competition, Fiore sees American Eagle’s price as a selling point. “I see a great opportunity for a value brand,” he said. “There are some developed national brands in China that will be competition. The first retailers to open stores there were the luxury brands.”