(Filed Under Financial and General Interest News). American Eagle Outfitters said it plans to close between 50 and 100 stores over the next two to five years, while targeting international growth through franchise agreements. The company completed the closure of its MARTIN + OSHA chain during the second quarter ended July 31, 2010, ending the period with 1,083 stores.
During the second quarter, net income dropped 66.2 percent, driven in part by the closure of MARTIN + OSHA. Comparable store sales decreased 1 percent, while total sales increased modestly to $652 million from $647 million last year. The company’s direct business cited a 9 percent sales drop compared to a 17 percent increase last year.
“The second quarter was a challenging period, resulting in a miss to our sales and profit plans,” Jim O’Donnell, chief executive officer of American Eagle Outfitters, said. “Given the consistencies in business trends and unpredictable consumer behavior, we have intensified our actions to improve efficiencies, streamline our process and strengthen profitability. We are committed to driving change across the organization and delivering sustainable long-term growth.”
Part of the problem, the company said, is its past investment in growth. Five years ago, it invested heavily to drive growth, and since 2006 sales performance has not kept pace with those investments.
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