In keeping with its strategic plan to strengthen its North
American presence, leading teen retailer,
American Eagle Outfitters Inc.
(
AEO
), came up with the proposal to open its first company-owned and
operated store in Mexico City.
The store, proposed to be opened in the Perisur's shopping
center, a mall based in the southern region of Mexico City, will
open to public on Feb 20, this year. This store opening is in
line with the company's decision to introduce a string of
vertically owned and operated stores in Mexico. As part of this
announcement, the company is slated to open 6 company-owned
stores in Mexico in 2013, with plans to further expand its store
base in the state over the next several years.
Moreover, the company stated that each of the stores opened under
the plan will either house a separate Aerie section within the
store, via a shop-in-shop format, or will have an Aerie store
adjacent to the AEO store.
We appreciate American Eagle's plan to step into Mexico to seek
growth given the ample opportunities in the market. The American
Eagle brand, over a short span of time has gained strong
recognition in Mexico as evident from the success of its
Mexico-specific e-Commerce site that was launched last fall.
Further, the company's entry into Mexico is expected to play a
key role in fulfilling its long-term goal of expanding globally.
The company's recent achievement on the international front was
marked by licensing its stores in Japan, Israel and Poland in
2012, as well as continually strengthening its presence in the
Middle East.
American Eagle currently markets its products through 50
international franchise stores in 13 countries. The company also
ships to 77 countries worldwide through its e-Commerce sites.
One of American Eagle's peers,
Gap Inc.
(
GPS
), also stepped into the Mexican market in Sep 2012, launching
its first stand-alone store in Mexico. Earlier, the company
offered the Gap brand through the store within a store concept in
Liverpool Department stores throughout Mexico.
With stringent focus on making a foray into the world markets,
American Eagle currently holds a Zacks Rank #2 (Buy). Other
stocks that continue to perform well in the apparel retailing
space are
DSW Inc.
(
DSW
) and
Citi Trends Inc.
(
CTRN
). Both these companies carry a Zacks Rank #1 (Strong Buy).
AMER EAGLE OUTF (AEO): Free Stock Analysis
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