American Eagle to exit 77 Kids brand
American Eagle Outfitters Inc said it will exit its children's-apparel business, which had a loss in the last fiscal year.
Pittsburgh: American Eagle Outfitters Inc., the teen-apparel retailer with more than 1,000 stores in North America, said it will exit its children's-apparel business, which had a loss in the last fiscal year.
The company is "exploring options," including a full or partial sale of assets, for the 77kids by American Eagle brand, Pittsburgh-based American Eagle said in a statement on Friday. The brand had a net loss of $24 million (Dh88.27 million) on sales of $40 million in the year ended on January 28, according to the statement.
Chief Executive Officer Robert Hanson, who started in January, has cut inventory and improved product assortment to boost profitability.
"Although making this decision is disappointing, it is in the best interest of the company and our shareholders to prioritise and focus our efforts on businesses with the highest return potential," Hanson, previously at Levi Strauss & Co., said in the statement.
American Eagle said in a separate statement that Chief Financial Officer Joan Hilson plans to step down after more than six years at the company. She will work through the end of July for an "orderly transition," and will be succeeded on an interim basis by Scott Hurd, vice-president and controller, until a replacement is found, the company said.
A charge tied to the 77kids brand sale will be taken, "primarily in the second and third quarters," the company said in the statement, without estimating the amount.
The brand 77kids targets babies, and children up to age 14, in 22 stores and online, the company said.
