NEW YORK — Less than two months from opening its first stores, American Eagle’s new retail concept, Martin + Osa, on Wednesday unveiled its fall collection’s “fusion” approach.
Executives said the collection transcends the merchandise sameness that plagues malls, and spotlighted items like “sweat chinos” and “denim metal ballerina skirts” to underscore the collection’s blend of classic styling, denim and active-sport attributes and innovative fabrications for comfort and tactile interest.
“No other brand fuses these sensibilities,” said Michele Donnan Martin, chief design officer of women’s merchandise for Martin + Osa, which entertained a total of 500 suppliers, investors and reporters with drinks, fondue and merchandise vignettes on the top two floors of Sky Studios here.
“There’s an unusual amount of attention to detail, design, fabrication and fit, but the price points are respectful of today’s consumer given all those elements,” said Arnold P. Cohen, chief marketing officer. Cohen, who formerly held top jobs with J. Crew, London Fog and J. Peterman, joined Martin + Osa, a division of American Eagle Outfitters, early this year.
The first Martin + Osa store is scheduled to open in Tysons Corner in McLean, Va. on Sept. 6. Four others will open this fall in NorthPark Center in Dallas, Newport Fashion Island in California, the San Francisco Center and the Woodfield Mall outside Chicago. Ten more will be operating by fall 2007.
The sweat chinos, in cotton twill with heather gray drawstrings and waistbands and no outseams, are priced at $98, while the ballerina skirts, offering a rumpled look, are priced at $78.
Also featured were twinset variations including an $88 fleece hoodie over a $68 silk charmeuse camisole; cotton-cashmere long jersey tanks for $38; stretch denim jeans with gingham pockets, priced at $108; nylon track chinos, $88, and cashmere flannel pleated tennis skirts, $118.
Outerwear appeared plentiful, including army jackets with a shirt jacket attitude, $128; nylon track jackets and anoraks for $98; hunting-inspired waxed cotton water-repellent blazers, priced at $148, as well as thin nylon vests for $98.
Executives described the color palette as “clean American” citing blues, grays and whites with pops of bright colors, and said accessories are also important to the collection, with $98 mohair shawls and merino reversible beanies priced at $48. Sneakers from other brands will be a big part of the assortment.
Overall, the look is modern and clean. The price points are generally competitive with Banana Republic and J. Crew, and the brand targets men and women aged 30 and older.
Reaction to the collection was positive. “Any time you open up something new it is a risk, but they have certainly spent a lot of time and money studying the customer,” said Dan Schwarzwalder, senior managing director of Buckingham Capital Management. “They have enormous passion and enthusiasm for the brand and that’s important. I believe they will make it happen. The merchandise looked good. I can’t wait to get the total feel of the environment when they open the stores.”
UBS upgraded American Eagle to “buy” from “neutral” on Thursday, citing confidence in the back-to-school assortment, new initiatives such as Martin + Osa and the intimate apparel subbrand, called aerie, being launched this fall too, AE’s expanding online business and store remodels. UBS raised its price target on shares to $41 from $34. American Eagle closed at $32.93 Thursday on the NYSE.
A research note from analyst Margaret Mager of Goldman Sachs & Co. read: “While we were impressed with the creativity of the event, we also found the following incremental takeaways helpful: Management reiterated its plans to open 10 to 15 stores in fall of 2007, immediately after Labor Day. Stores will range in the 6,500- to 7,500- square-foot in size, and skew toward the low end of the range. Pricing is significantly higher than the American Eagle concept. Where denim is 20 percent of American Eagle’s product mix, the company expects denim to be at or lower than this percentage at Martin + Osa.”
Mager also noted that AE maintained its guidance that Martin + Osa will be a 12 cent drag on earnings in 2006 versus 6 cents in 2005. “The concept will not become a meaningful growth driver for the company until 2008-2009 at the earliest. Until that time, we think fundamentals will continue to depend on the core American Eagle brand whose growth will primarily be a function of market share gains and same-store sales growth,” Mager wrote.
Martin + Osa executives have also said that they are devising quirky marketing and a distinctive store design to support the merchandise. Ads will be humorous, imbued with the surreal notion of bringing elements of the outdoors indoors. The campaign includes a call for customers to be socially conscious by bringing in their old jeans to the stores to be distributed to charities.
Martin + Osa windows will be covered with wood and a strip of opaque blue glass, but there will be forms with the Martin + Osa look just by the entrances, which will be 18 feet wide and without doors to give a good view inside the store and provide a sense of openness.
The late Martin and Osa Johnson were an adventurous couple from Kansas who explored East and Central Africa, the South Pacific Islands and North Borneo and wrote books and created films chronicling their travels. They studied the wildlife and the people of those regions.