Jen Foyle, Aerie global brand president and American Eagle Outfitters chief creative officer, shed some light on the brand’s expansion plans for Retail Brew.
By Halie Lesavage | Link to article
Two billion dollars. That’s the ambitious sales target Aerie yesterday told investors it’ll hit by 2023. Given recent performance, doubling its total revenue in three years looks doable.
- Sales at Aerie have grown by double digits for 24 consecutive quarters.
- Its share of the US intimates market grew to 6.7% in 2020 from less than 2% in 2015, per Euromonitor data.
To hit $2 billion…Aerie’s relying on much more than TikTok’s favorite leggings. Jen Foyle, Aerie global brand president and American Eagle Outfitters chief creative officer, told Retail Brew via email that it has big IRL expansion plans.
- “Aerie has meaningful runway to expand to large consumer markets where we currently have a limited presence,’” Foyle said. “Today, we operate 342 stores and expect our footprint to reach approximately 550 stores by 2023.”
- Those markets = regions west of the Mississippi, including large metro areas like Dallas, Houston, Los Angeles, and San Diego.
What about the competition? Aerie’s gained attention, and market share, in the intimates category through its emphasis on inclusivity. Now several upstart brands are also finding success with anti-supermodel approaches.
- One example is Parade, which launched in 2019 and sold 700,000 pairs of underwear in 2020.
Foyle told Retail Brew that Aerie’s “engaged and loyal customers” will make the difference. They embraced Aerie’s early empowerment messaging years ago, and they encouraged it to expand to athletic wear via its Offline collection in 2020.
- While 60% of Aerie’s sales came from intimates in 2015, only 31% originated there last year. Meanwhile, “soft apparel” grew from 21% to 33%, and athletic apparel increased from 5% to 20% of sales in the same period.
- Soon, Aerie plans to open more standalone Offline by Aerie stores to complement its online biz, Foyle said.
“A tale of two brands”
Dickensian references are a minor flex from former English majors and a cautionary sign from retail execs like American Eagle CFO Mike Mathias. While it’s the best of times at Aerie, it’s less so at parent brand American Eagle.
- The denim-focused retailer projected revenue overall and at its flagship brand to fall by single digits in Q4 2020.
- AEO’s huge fleet of mall stores hampered it in 2020. As a result, it plans to cut up to 250 stores from its roster of 880 over the next few years.
Bottom line: Aerie isn’t the first sister brand to outpace its originator’s growth—just look at Madewell and J.Crew or Old Navy and Gap. But if Aerie can meet its flashy goal while gaining share over competitors, it could be the first to sustain its breakout success long term.