American Eagle retools Manhattan operations as part of building global identity

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NEW YORK -- Under construction scaffolding covering the entry of the American Eagle Outfitters store in Times Square recently, temporary signs were set up to alert the crowds that they could still shop at the multi-level emporium packed with the Pittsburgh company's wares.

Among the messages: "Estamos abiertos," "Nous sommes ouverts," and, for good measure, "We're open."

Internationally flavored chatter permeates the crowds of shoppers strolling, taking pictures and carrying bags through Manhattan, a bustling place that American Eagle has used in recent years to raise the teen brand's profile, certainly in the fashion industry but also, perhaps, on the global shopping scene.

The teen clothing retailer's design offices aren't far from plaques along Seventh Avenue honoring style industry icons such as Norma Kamali, Geoffrey Beene, Liz Claiborne and Halston. In this part of the city, small stores can be found devoted to buttons, trimmings or even fashion magazines from around the world.

Here it is easy to be part of the rounds that editors of numerous publications make through the industry's fashion showrooms, as they choose clothing and accessories to use in the next spread on the latest color trend or the hot uses of denim. American Eagle keeps a showroom displaying clothing for upcoming seasons so it can serve the needs of magazines with long deadlines, and another with goods from the current season for media such as newspapers with very short ones.

Being visible within the industry helps in being seen by more customers, but American Eagle also uses its stores to get in front of the multitudes who flow through New York. There is more than one company store in Manhattan, and international visitors checking out the sights are unlikely to miss the one in Times Square adorned with a huge LED billboard flashing images of models in the latest styles or customers posing with their friends.

The company's various spaces in New York -- it has offices in three different buildings that currently hold about 250 employees, said Iris Yen, vice president, communications -- are being remodeled and reconfigured to serve the direction being set by CEO Robert Hanson.

Areas that once served the now-defunct 77kids and Martin + Osa concepts that were meant to be growth vehicles are being repurposed. An effort, known as "omni," to seamlessly integrate the company's online and offline retail offerings as well as a push into other countries are now getting the energy, the expenditures and the office space.

American Eagle has more employees in Pittsburgh: about 800 workers are on the South Side in the headquarters complex and another 400 at the distribution center in Marshall. A new office is being added in San Francisco.

"We are hiring a lot to support omni," Ms. Yen said recently as she led a tour of the Manhattan offices, adding, "We are expanding international as well."

The recruiters were out-of-office that day, she said, traveling in search of brand managers and staff to help take the chain's wardrobe of jeans, knit tops and dresses into new cultures.

In a March conference call with analysts to discuss earnings, Mr. Hanson laid out an ambitious plan. "In terms of what we would see when we're kind of a much more significant global player, we targeted to probably have somewhere between five and 10 country clusters, I'll call it, that we would be running directly ourselves, like we run in Canada and Mexico and now China," he said.

Mr. Hanson said some markets, such as India and Brazil, might involve joint ventures since it is important to have a partner in those places.

A slide from a company market presentation showed that at the end of the last fiscal year American Eagle had stores in the United Arab Emirates, Saudi Arabia, Russia, Kuwait, Lebanon, Poland, Egypt, Jordan, Morroco, Israel, Japan, China and Hong Kong. Also this year, the company opened its first store in Mexico and the Philippines.

"The way I would look at it ... is probably to think about us opening somewhere around seven to 10 countries a year, the majority of which would be licensed countries, and one to two would be direct to joint ventured annually," Mr. Hanson said.

Ms. Yen said it's not unusual to see the international team showing up at odd hours as they work to communicate with colleagues around the world. American Eagle typically hires from within the countries it is moving into, she said, paying attention to local norms. "That international piece is so important to get right."

Mr. Hanson has also put a priority on opening new stores in high-profile U.S. markets that he considers underserved, including Miami and New York. And he's said the company sees significant opportunity in the outlet market, where American Eagle has not been a major player.

In the New York design offices, rooms filled with racks of clothing or neatly folded piles give a hint of the extensive planning required to supply fashion to feed those ambitious projects, with signs such as "Holiday 13" and "Outlet BTS" (back to school) labeling the colorful, confusing array of apparel in development.

When the styles are ready, they'll show up in stores -- whether that's in Times Square or on Bonifacio High Street in Taguig City, Manila.

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Teresa F. Lindeman: or at 412-263-2018. First Published May 17, 2013 4:15 AM


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