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American Eagle Forays into UK

Zacks Equity Research

Leading teen retailer, American Eagle Outfitters Inc. (AEO), makes further progress on its international expansion plans as it announces its entry into the United Kingdom with the opening of three new company-owned and operated stores.

In England, American Eagle will debut at the Bluewater premier mall in Kent as well as the Westfield Group’s London and Stratford City shopping centers. Apart from luring England’s masses with the American Eagle Outfitters brand, the stores coming up at the Westfield centers will also feature the company’s aerie brand in the form of shop-in-shops. All of these stores are slated to open doors in the English autumn of 2014.  

The Westfield Group London centers are located in the thick of the U.K. market with a footfall of nearly 66 million shoppers every year. On the other hand, Bluewater happens to be one of the biggest and flourishing retail locations in the country with over 28 million shoppers walking in every year.

The company is confident of gaining significant exposure as it launches its first set of outlets in the three most popular shopping destinations in the U.K. The company’s American Eagle Outfitters and aerie brands have seen incredible global demand, driving its strategy to expand internationally.

Though the company’s earnings performance has been dismal for quite some time now, we remain impressed by its transformation plans focused on strengthening product assortments, store rationalization, diligent inventory management and e-Commerce growth. Further, we believe the company’s international expansion plans together with its omni-channel growth provides significant opportunity to expand its business and cater to worldwide demand.

Currently, American Eagle carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Some better-ranked stocks worth considering in the sector include Citi Trends Inc. (CTRN), Christopher & Banks Corp. (CBK) and Foot Locker Inc. (FL). While Citi Trends and Christopher & Banks sport a Zacks Rank #1 (Strong Buy), Foot Locker carries a Zacks Rank #2 (Buy).

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