US teen retailer American Eagle Outfitters has its sights set on European expansion as it prepares to open its first three stores in London, in the time for the seasonal holiday shopping rush. The apparel retailer previously confirmed its launch in the UK with three store opening and earlier this week increased its guidance for the fourth-quarter, ahead of the opening of its first London store.
American Eagle now expects adjusted earnings of 0.22 dollars a diluted share, above the previous guidance of between 0.17 dollars and 0.19 dollars. The teen retailer said the increase in its outlook was primarily due to an improvement in markdowns and lower expenses, in spite of a comparable sales dip of 5 percent.
“Third quarter earnings exceeded our expectations and margins were ahead of last year. We are encouraged by our ability to reduce promotional activity, particularly given the challenging and highly promotional retail climate,” noted Jay Schottenstein, Interim CEO. With a positive outlook for the future, the teen retailer gears up for its launch into the UK market.
American Eagle's first store in London is set to open its doors on Friday at Westfield White City. Next up to open is its store located at Westfield Stratford, which will open on November 17 and then its shop at Bluewater, set to open November 21. The stores will be the first American Eagle stores on the continent that are will be solely operated by the retailer, as the three stores in Russia and two in Poland which are part of its European arm are licensed.
The launch comes nearly nine years after the apparel retailer first began eyeing the London market as a possibility for expansion. “We’ve done a lot of work since that time [to refresh] the strategy of our real estate profile. When we first looked at how our consumer shopped back in 2009, we were thinking the area could support 50 stores,” said Simon Nankervis, executive vice president for Americas an d global country licensing to WWD.
“Today, with the high digital penetration in the markets for online, that’s probably close to the low 20s for a brick-and-mortar footprint.” After the stores openings, American Eagle aims to focus on developing a “full digital presence in the UK,” before it continues opening more brick and mortar stores across the country.