It started as a small clothing retailer, but in the three decades since its inception American Eagle has become a clothing store where teens and young adults have purchased the latest fashions at shopping malls across the United States.
The first American Eagle Outfitters store opened in Pittsburgh, Pennsylvania, in 1977--at a time when enclosed shopping malls were sprouting up across the country. Founders Mark and Jerry Silverman were experienced retailers, operating a Silverman's Menswear in the area. The formation of American Eagle was an effort by the Silvermans to enhance the array of clothing they were selling. American Eagle became a subsidiary of their company, Retail Ventures Inc.
As shoppers were flocking to malls, American Eagle followed that trend by opening new stores throughout the 1980s. A catalog also was established in an effort to further enhance success. By 1989, there were 137 American Eagle stores in 37 states.
Struggles in the 1990s
Despite an early wave of success, American Eagle was reportedly losing money in the early 1990s. By 1991, growth had slowed to a trickle with only 16 new stores opening in a two-year period. The Silvermans decided to sell their share of ownership to businessman Jay Schottenstein, who had a 50 percent interest in the company since 1980.
Changes Under New Leadership
Under Schottenstein's leadership, several tweaks were made to American Eagle. As the 1990s progressed, the clothier began to distinguish itself from competitors by selling casual, private label men's and women's clothes. In an effort to bring in new cash, American Eagle became a publicly traded company in 1994 on the NASDAQ exchange.
Growth With New Strategy
American Eagle continued its rapid growth after becoming a publicly traded company. In 1995, more than 90 new stores were opened, bringing the total to more than 250 locations. The retailer gained an international presence when Schottenstein decided to open the first American Eagle store in Canada in 2001. At the turn of the century, the company began to tighten its focus, targeting mostly women between ages 15 and 25. According to executives, revenue had reached $1 billion--about five times the income in the mid 1990s.
In a nod to its growth, American Eagle executives have launched three spinoff stores, in part to address customers displaced by the limited focus of the flagship store. Martin + Osa, which opened in 2006 as a stand-alone store separate from American Eagle, sells casual clothing aimed at men and women ages 28 to 40. That same year, American Eagle introduced an intimates sub-brand known as aerie, targeted toward girls and women between 13 and 25. Since first being introduced within American Eagle, aerie branded clothing has been sold in more than 100 stand-alone stores. American Eagle's newest store, 77kids, is currently only an online venture, although executives plan on opening physical retail stores after 2010. 77kids targets children between 2 and 12.