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American Eagle Outfitters is currently riding a wave of popularity among its teen and young-adult market. With trendy but high-quality clothing in affordable price ranges, the chain of almost 850 stores is a top destination for 15 to 25-year-old.
American Eagle appeals to teens looking for a casual but preppy look. In price range and style choices, it fills a middle ground in the teen and young adult market.
American Eagle’s long-standing partnership with MTV began with the hit show Road Rules, for which it provided cast wardrobes. The relationship was recently expanded to include American Eagle’s sponsorship of MTV’S wildly popular Spring Break promotion, recently held in Cancun. “Spring Break is more than just a vacation for our customers-it is a lifestyle. Memories are made on spring break, and our goal with MTV is to make sure this Spring Break is the best ever and the most memorable,” said American Eagle’s chief marketing officer of the Cancun bash.
The company is far from taking a vacation, however. After a couple of difficult years when its fickle market shopped elsewhere and sales plunged, American Eagle Outfitters has been beating sales projections in a comeback that brought an increase in sales of nearly 32 percent.
But despite the good news at the mall, with 850 locations management knows the chain is about run out of room to spread its wings. It is considering expanding the American Eagle brand into Asian markets and is also expected to soon start testing a new store concept at home for a slightly older market that will provide fresh avenues for continued growth.
Questions for Critical Thinking
1) American Eagle Outfitters has not yet released the name of the new retail clothing chain it plans to test, or any details about the store concept it is considering. What product mix strategies do you think American Eagle would be wise to try to leverage any brand loyalty among its current customers to win them over to the new stores? Why or why not?
2) Why do retailers in the faddish teen market make their brand names and logos so prominent on many of their T-shirts, polos, jeans, and sweats? Do you think brand names are the only feature that distinguishes one teen retailer’s product line from another’s? Why or Why not?
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