American Eagle Outfitters 2008 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 2008 American Eagle Outfitters annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

Remodeling of our AE stores into our current store format is important to enhance our customer’s shopping
experience. In order to maintain a balanced presentation and to accommodate additional product categories, we
selectively enlarge our stores during the remodeling process to an average 7,000 gross square feet, either within
their existing location or by upgrading the store location within the mall. We believe the larger format can better
accommodate our expansion of merchandise categories. We select stores for expansion or relocation based on
market demographics and store volume forecasts.
During Fiscal 2008, we remodeled 30 AE U.S. stores. Of the 30 remodeled stores, 18 stores were remodeled
and expanded within their existing locations, 10 stores were relocated to a larger space within the mall and two
stores were remodeled within their existing locations. Additionally, three stores were refurbished as discussed
below.
We maintain a cost effective store refurbishment program targeted towards our lower volume stores, typically
located in smaller markets. Stores selected as part of this program maintain their current location and size but are
updated to include certain aspects of our current store format, including paint and certain new fixtures.
AE Brand
American Eagle is an established and leading brand for 15-25 year olds, with a long heritage of quality
merchandise offered at a great value. We believe that we can leverage the success we have had in making American
Eagle a destination brand and increase market-share in brand-defining key categories. In Fiscal 2009, we expect to
strengthen categories such as knit tops, jeans, sweaters, dresses, shorts, fleece and accessories by offering AE
classics combined with relevant fashion. We have reinforced our customer connection and increased our focus on
identifying emerging fashion trends that are embraced by the AE customer. We will highlight AE value offerings by
strengthening our everyday value pricing, as well as with promotional events planned throughout the year. Our
customer loyalty program, the AE All-Access Pass˛serves as a critical one-on-one connection point with our best
customers and rewards brand loyalty.
aerie by American Eagle
In the fall of 2006, we launched our new intimates brand, aerie by American Eagle, which targets our core AE
customers. The aerie collection offers Dormwear»and intimates collections for the AE»girl. It is intended to drive
store productivity by expanding the product categories and building upon our experience. The aerie collection is
offered in 116 stand-alone stores, predominantly all American Eagle stores and on aerie.com. aerie also offers its
customers a loyalty program, the aerie a-list˛. aerie rewards its a-list members with a free special gift on any
Thursday of their choosing, once a month.
Based on the positive customer response to aerie, in Fiscal 2008, we accelerated our real estate strategy for this
brand. Our accelerated strategy included opening 77 stores during Fiscal 2008. The aerie brand remains a focus in
Fiscal 2009, with planned openings of approximately 17 stores.
AEO Direct
We sell merchandise via our e-commerce operations, ae.com and aerie.com, which are extensions of the
lifestyle that we convey in our stores. In Fiscal 2008, we expanded AEO Direct through the addition of e-commerce
operations for martinandosa.com and 77kids.com. During Fiscal 2008, we added 21 countries to our shipping
destinations and currently ship to 62 countries. In addition to purchasing items online, customers can experience
AEO Direct in-store. The Company has implemented a new program called Store-to-Door, which enables store
associates to sell any item available online to an in-store customer in a single transaction, without placing a phone
call. Customers are taking advantage of Store to Door by purchasing extended sizes that are not available in-store, as
well as finding a certain size or color that happens to be sold out at the time of their visit. The ordered items are
shipped to the customer’s home free of charge. During Fiscal 2008, we began accepting PayPal as a means of
payment from our ae.com, aerie.com and 77kids.com customers. We are continuing to focus on the growth of AEO
Direct through various initiatives, including improved site efficiency and faster check-out, expansion of sizes and
styles, unique online content and targeted marketing strategies.
4