American Eagle Outfitters Considers Closing 11% of Stores

With comp store sales down 8% for the first quarter of 2011, American Eagle Outfitters' CEO James O'Donnell revealed that the retailer will close up to 35 stores in 2011 and a large number of stores are being considered for potential closing within the next two years.
"This year, you're going to see somewhere between 25 and 35 stores that probably will close," said O'Donnell in a conference call discussing Q1 earnings. "Based on the financials as of today, 85 to 100 would be considered for potential closing. [This doesn't] necessarily mean we're going to close them, but we would look at them and contemplate closing."
In an attempt to keep the number of store closings to a minimum, American Eagle Outfitters plans to return to its heritage and replenish its assortment to include more denim and preppy styles for back-to-school, with changes being made full-force by fall. The initiative will be backed by a targeted marketing campaign.
"As we are looking at some of the initiatives that we're embarking on in depth, some of [the 100] stores should respond very nicely and so that is not a number we're locked in to," explained O'Donnell.
In addition to these new initiatives, the retailer says it is encouraged by the results of 200 store remodels through the first quarter.
"Our results on the remodels have been very positive," explains O'Donnell. "They, overall, are in the mid- to low-single-digits over their previous sales cadence, and so we're encouraged."

For related content: Store Closing Rates Drop 36% but Retailers Should Remain Cautious
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