By: Jean E. Palmieri | Link to article

In receiving an honorary doctorate, the designer told students to be creative, curious, persistent and nice.

What do Taylor Swift and Todd Snyder have in common? They can both now officially be called “Doctor.”

Last week Swift received an honorary doctorate degree from New York University and on Monday, Snyder was awarded a similar title, receiving an honorary Doctor of Commercial Science degree from LIM College. Snyder was also presented with the school’s distinguished achievement award and gave the keynote address at LIM’s 83rd annual commencement in Central Park’s Rumsey Playfield.

LIM College president Elizabeth S. Marcuse said Snyder was selected for the honor because he is “an entrepreneurial innovator who has redefined American menswear and injected new excitement into the retail experience.” She also singled out Snyder’s “robust internship program” and pointed out that a LIM graduate was recently hired as an assistant merchant at Snyder’s company after completing a merchandising internship.

In his address, Snyder mapped out what he believes is the road to success in fashion and encouraged the students to take advantage of the opportunity they have as graduates of a college in the heart of New York City.

“I grew up in Iowa, I graduated from Iowa State in 1992,” he said. “I moved to New York to try to get into this industry. I worked at great places like Ralph Lauren, and J. Crew, for free, just to get my foot in the door. You guys have a huge advantage today, standing here in New York, graduating from this amazing college because of the people and the faculty that you know.”

He went on to offer advice on the skills they will need to get ahead. “It always comes down to four simple steps,” he said. “One is be creative, no matter what it is you’re doing. Pushing creativity always pushes the boundaries. You don’t have to do things the exact same way it was done in previous times.”

The second skill is to be curious. “Don’t just take things on status quo,” he said. “Always be asking questions, learning as much as you can along the way. I remember when I used to go on trips to Asia, and I couldn’t wait to meet these factory owners and technicians and understand how something is made. That’s how I really mastered what I was doing.”

Third is to be persistent and never give up, Snyder continued. “I’ve been knocked down. I don’t know how many times I’ve been told ‘no.’ It’s really hard to take that criticism, but at the same time, it’s important for you to keep going. [And at the same time], it’s important for you to really understand what that person on the other side is saying and to have the respect for that person.”

The last life lesson the students need to learn — and perhaps the most important, he said — is to simply be nice. “I know it sounds silly, but being nice is probably the most important thing. Nobody in a job ever wants to promote jerks. You have to have respect not only for your boss, but the people around you.”

It was these four things that really helped Snyder succeed in his career and have the wherewithal to launch his own collection. He singled out Ralph Lauren and Millard “Mickey” Drexler, the former chief of The Gap and J. Crew, as integral to his education in the industry and recalls his father telling him: “If you want to be the best, work for the best.

“I would not be able to launch my own company like I did 10 years ago, if I hadn’t had those connections.”

If the students follow his advice, Snyder said, they will also find themselves on the path to success. “If you get three of those things right, you’ll probably be working for some cool brand and I’d love to do a collaboration with you at some point. But if you get all four right, more than likely we will be working for you guys at some point.”

In her address to the graduates, Marcuse likened the ceremony to another major Central Park event, the finish of the annual New York City Marathon, saying, “Earning your degree was your own personal marathon. I hope you will draw upon the confidence you’ve developed, the skills and knowledge you’ve acquired, and the life lessons you’ve learned to aim for that promotion, to build that thriving business, to follow through on that desire to make our world more equitable and sustainable, or to reach whatever goal is guiding you. Because you have proven that you do have it in you to cross the finish line, however far away it may seem at the start.”

During the graduation, LIM presented its Maxwell F. Marcuse Award, its highest alumni honor, to Lisa R. Bannister, vice president of home digital for Ralph Lauren and a class of 1994 graduate. In addition, Lauren Gallo, class of 2007, who is senior director of brand marketing and creative at Nike, received the Shining Star Alumni Award while Elisabeth Gil, Class of 2015, senior manager of global brand supply chain for The Estée Lauder Cos., received the Rising Star Alumni Award.

AEO Inc. Reports First Quarter 2022 Results

• Shifting macro combined with difficult compares proved challenging
• Sales miss resulted in operating profit and margin below expectations
• Taking swift measures to reset inventory and expense plans for second half to better align with consumer demand
• Brands remain strong with performance continuing to reflect structural improvements compared to pre-pandemic 2019

05.26.22

PITTSBURGH — (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the first quarter ended April 30, 2022.

“The first quarter proved challenging, with demand well below our expectations, pressuring operating profit. Comparisons from an extraordinary spring last year driven by stimulus payments and pent-up customer demand, were compounded by rising inflation, higher gas prices and a stronger than anticipated pivot to other discretionary categories. In hindsight, our plans entering the year were too optimistic.  We are taking swift measures to adjust our inventory and expense base with a firm goal of entering the second half better aligned with demand trends,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

“Despite near term challenges, our brands continue to reflect progress from pre-pandemic periods, grounded in our Real Power. Real Growth strategy. Aerie remains on a remarkable trajectory with revenue more than doubling and profit expanding over five-fold versus first quarter 2019. Greater focus in our assortment and real-estate footprint at AE continue to drive efficiencies in the business. We are committed to maintaining and building on these structural improvements and right-setting the business to deliver improved profitability in the second half,” continued Mr. Schottenstein.

First Quarter 2022 Results:

• Total net revenue increased $20 million, or 2% to $1.055 billion, compared to $1.035 billion in the first quarter of 2021. Our supply chain acquisitions contributed approximately 3 percentage points to revenue growth.
• Aerie revenue of $322 million rose 8% reflecting a 27% 3-year revenue CAGR. American Eagle revenue of $686 million declined 6% versus first quarter 2021 reflecting a -2% 3-year revenue CAGR.
• Consolidated store revenue increased 2%. Total digital revenue declined 6%. Compared to pre-pandemic first quarter 2019, store revenue increased 1% and digital revenue increased 48%.
• Gross profit of $388 million declined 11% from $436 million in the first quarter of 2021 and reflected a gross margin rate of 36.8% compared to 42.2% last year. Higher freight costs impacted the gross margin by approximately 340 basis points and our supply chain business had a 120 basis point impact as we integrate and ramp up the platform. Delivery and rent also increased, offset slightly by lower incentive compensation accruals.
• Selling, general and administrative expense of $299 million increased 13%. SG&A increased 270 basis points as a rate to sales versus first quarter 2021 primarily due to increased store wages and hours and corporate compensation, professional services and advertising partially offset by lower incentive compensation accruals.
• Operating income of $42 million included $35 million from higher freight costs and a $12 million loss from the supply chain acquisitions and compared to operating income of $133 million in the first quarter of 2021.
• Average diluted shares outstanding were 220 million, compared to 207 million in the first quarter of 2021. The increase primarily reflected 49 million shares of unrealized dilution associated with the company’s convertible notes, consistent with the required adoption of ASU 2020-06 this quarter, compared to 34 million shares in the first quarter of 2021.
• EPS of $0.16 includes an approximately $3 million addback to net income of interest expense associated with the company’s convertible notes, in-line with the adoption of ASU 2020-06 this quarter.

Inventory

Total ending inventory at cost increased 46% to $682 million compared to $467 million last year. Higher costs drove roughly half of the increase. From a brand standpoint, AE and Aerie each drove roughly half of the increase. Total units were up 24%, due to higher in-transit and on-hand inventory, including 7 points of growth related to Aerie and OFFL/NE new store openings. Based on current demand trends, management is resetting inventory for the second half and will clear through excess Spring goods in the second quarter.

Capital Expenditures

In the first quarter of 2022, capital expenditures totaled $58 million. We expect full-year capital expenditures to be approximately $275 million.

Cash Flow

The company ended the period with total cash of $229 million. Total liquidity including available credit was $581 million.

Shareholder Returns

The company’s first quarter $0.18 per share cash dividend amounting to $30 million was paid during the quarter.

Outlook

For the second quarter, management expects top-line growth to trend similarly to the first quarter with a gross margin rate of approximately 33%. This reflects higher markdowns to clear through spring inventory, higher freight costs and the impact of the supply chain acquisitions.

Incorporating shifts in the macro environment, the company is lowering its outlook for the year. Management expects operating profit to be above $314 million achieved in Fiscal 2019, with total revenue up in the low single digits compared to Fiscal 2021. The company expects to enter the second half better aligned with demand, with a more balanced inventory position and leaner expense base, driving improved margins and profitability relative to the first half.

The company will provide updates to the longer-term outlook once visibility into the macro and business trends improves.

Conference Call and Supplemental Financial Information

Management will host a conference call and real time webcast today at 4:30 p.m. Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 or go to www.aeo-inc.com to access the webcast and audio replay.  Additionally, a financial results presentation is posted on the company’s website.

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About American Eagle Outfitters, Inc.

American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle® and Aerie® brands. Our purpose is to show the world that there’s REAL power in the optimism of youth. The company operates stores in the United States, Canada, Mexico, and Hong Kong, and ships to 81 countries worldwide through its websites. American Eagle and Aerie merchandise also is available at more than 200 international locations operated by licensees in 25 countries. For more information, please visit www.aeo-inc.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This release and related statements by management contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which represent our expectations or beliefs concerning future events, including second quarter and annual fiscal 2022 results. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on many important factors, some of which may be beyond the company’s control. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “potential,” and similar expressions may identify forward-looking statements. Except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise and even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. The following factors, in addition to the risks disclosed in Item 1A., Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended January 29, 2022 and in any other filings that we may make with the Securities and Exchange Commission in some cases have affected, and in the future could affect, the company’s financial performance and could cause actual results for fiscal 2022 and beyond to differ materially from those expressed or implied in any of the forward-looking statements included in this release or otherwise made by management: the negative impacts of the COVID-19 pandemic and related operational disruptions; the risk that the company’s operating, financial and capital plans may not be achieved; our inability to anticipate customer demand and changing fashion trends and to manage our inventory commensurately; seasonality of our business; our inability to achieve planned store financial performance; our inability to react to raw material cost, labor and energy cost increases; our inability to gain market share in the face of declining shopping center traffic; our inability to respond to changes in e-commerce and leverage omni-channel demands; our inability to expand internationally; difficulty with our international merchandise sourcing strategies; challenges with information technology systems, including safeguarding against security breaches; and global economic, public health, social, political and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, which could have a material adverse effect on our business, results of operations and liquidity.

CONTACT:    

Olivia Messina

412-432-3300

LineMedia@ae.com

By Edward Hertzman | Link to article

Money in fashion is made with the back end. Yes, runway looks and fashion shoots garner all the attention, but the ability to produce and deliver goods in the most efficient and cost-effective way ultimately separates the winners from the losers. But the supply chain we currently have is severely underfunded and in need of a massive retooling. Cue Shekar Natarajan and his radical solution.

Natarajan is the executive vice president and chief supply chain officer for AEO, the parent company of American Eagle Outfitters, and he has a career spanning some of the top U.S. nameplates (Coca-Cola, Walmart, and Target, to name a few). He believes that the future of retail and delivery hinges on creating a platform that all companies can use to share supply-chain assets and resources. After AEO acquired several logistics companies in 2021, Natarajan began to execute his idea of a shared back-end environment by building a logistics platform that other companies could access as well. This shared resource pool paid quick dividends. The network already counts 67 retailers, including AEO, on its client roster, along with 30 logistics partners.

The model is designed to lower costs over time for everyone in the network and help them operate more sustainably. The idea is that brands and retailers will be better able to compete with the largest companies in the world—at least when it comes to logistics. And early days are seeing signs of success. Though in its infancy, the nascent platform has allowed users to deliver e-commerce orders to end consumers one and a half days faster, and reduced parcel miles traveled by 10%.

Edward Hertzman: We all know the supply chain is broken. While the pandemic was the straw that broke the camel’s back, the system has been struggling for years. Couple that with the rise of mega players in the retail space, where the economies of scale have made it extremely difficult for small and midsize players to compete. Does that sound about right to you?

Shekar Natarajan: It’s obvious that supply-chain capacity is constrained. The pandemic accelerated e-commerce by several years and made freight, warehouse, last-mile, labor, and other capacity constraints worse than ever. Growing retailers are now all competing for a bigger share of these limited resources, but they’ve been operating under a misperception that they need to own their own supply-chain assets.

That doesn’t make sense for smaller and midsize retailers because, no matter how much they invest in acquiring more capacity, they’ll never be able to achieve the same efficiencies that let them compete on supply chain with the biggest players—the Walmarts and Targets of the world. Those enterprises have been investing in their supply chains for decades, move tens of billions of products a year, and have the might to get their own shipments prioritized by logistics companies, leaving less capacity available to everyone else.

If you think about it, companies don’t typically own the factories where their goods are manufactured, or the ships and trucks that move those goods. They may own a distribution center, but they don’t own the labor that runs it. They don’t own DHL, FedEx, or UPS. So many retailers have tried to build their own vertically integrated supply chains, but building more assets and buying more resources is not the answer to achieving hyper-scale efficiencies. Sharing is.

That’s been the key for some of the fastest-growing companies we’ve watched over the last decade. They’ve scaled quickly, but they don’t own the assets needed to deliver their services. Airbnb doesn’t own a single hotel room. Uber doesn’t own the cars passengers ride in. And Seamless doesn’t own restaurants. An open, shared supply-chain network is the only way to level the playing field, so companies of all sizes can compete with the biggest players.

I heard you say repeatedly that most supply chains aren’t efficient. Do you believe brands and retailers would agree? Companies view their supply chains as competitive advantages that they like to keep close to their chest. Are they wrong?

The typical supply chain is sub-scale. Say a midsize retailer owns a distribution center that’s big enough to accommodate its fulfillment needs over the peak holiday season. That’s only about four weeks of the year, which means the center runs at only about 60% of capacity for the other 48 weeks. Also, because of land-use regulations and the infrastructure needed to support operations, this facility will be competing with other companies’ distribution centers in the same area for resources like electricity and labor.

Even if this hypothetical company is extremely good at controlling this narrow part of its supply chain, it will end up paying proportionally more to operate than the biggest enterprise retailers because they can access hyper-scale efficiencies. The mid-tier retailer will never be able to level the playing field with the biggest names.

Some retailers have ruled for years by having a superior back end. If they can’t win in sourcing and logistics, where is their competitive advantage?

Listen, the back end is not the place to try to compete with other retailers and brands—the front end is. Retail companies should be free to focus on competing on product and customer experience. That’s what they do best and that’s what customers look to them to do. Shoppers don’t care about back-end operations, the engineering behind a company’s e-commerce site, or trucking capacity constraints. Sharing resources drives efficiencies that allow every brand compete on its core offerings.

Your company you work for acquired AirTerra and Quiet Logistics last year. Was this the first step in putting this kind of network together? And why did you land on these two firms? What separated them from the many new logistics companies out there?

I started envisioning this new kind of shared supply-chain model about four and half years ago, and the AEO leadership team has been extremely supportive of making the concept a reality, culminating with these 2021 acquisitions. AirTerra aggregates packages from multiple shippers and delivers them through its transportation network to drive scale efficiencies. Quiet Logistics operates a network of fulfillment, consolidation, and sortation centers that let brands position inventory closer to stores and consumers’ homes. Both companies are anchored in a sharing model.

Can you tell me what originally inspired this idea of creating an open supply-chain network? Was it to create an advantage at American Eagle or was it sparked long before you joined AE?

I grew up in an area of India where many people didn’t have access to adequate educational opportunities or even electricity, and I think the developed world could learn a few lessons about dealing with scarcity from the developing world. Companies are now having to deal with the kind of constrained resources that less-well-off people across the globe have always had to deal with.

In my view, most midsize retailers [firms with annual retail between $100 million and $1 billion] have two big problems. First, they misperceive that their brick-and-mortar stores are the best places to add last-mile fulfillment capacity. Retail stores are typically too small for this. Also, inventory in the store often has to be picked, packed, and shipped to a customer way across the country, which is highly inefficient. And store associates aren’t logisticians, so they can’t be expected to optimize fulfillment on their own. Solutions like curbside pickup have become really popular during the pandemic, but so have same-day and next-day home delivery, and those present additional problems because, for most companies, the last mile actually equates to about 1,300 miles.

And that’s not even getting into the problem of why we all get orders delivered at home in multiple packages, most of which have one tiny item packed in a big box filled with packing material. What if all the stuff came in one box? We’re looking to help brands share resources all the way to the consumer’s doorstep—click to door, we call it.

The second problem is that mid-tier companies will never achieve the same scale that lets the biggest retailers become hyper-efficient. Walmart, for example, may move 50 billion products a year. It may move as many units in just half a day as AEO does all year. No matter how well-run a midsize retailer’s supply chain is, or how much it invests, that company will never, ever be able to catch up and compete on supply chain with the biggest names.

I started envisioning this shared platform when I realized that supply chains are not competitive advantages for brands; efficient supply chains are. If every retailer shared supply chain assets, we could reduce transportation miles by 9 trillion a year, have 90,000 fewer trucks on the road, and massively reduce the industry’s carbon footprint. In the end, scalability in the supply chain is about sustainability—both environmentally and financially.

Edward Hertzman is the founder & president of Sourcing Journal and the executive vice president of Fairchild Media.

By Liz Warren | Link to article

American Eagle Outfitters’ higher-end label is expanding to New York City.

Unsubscribed—a self-described “slow fashion” women’s brand that complements the company’s American Eagle, Aerie, Todd Snyder and Offline brands—launched in the summer of 2020 during the Covid-19 pandemic, and is now making its way to Manhattan’s Upper East Side.

Featuring patina mirrors, brass chandeliers, a vintage-inspired checkered floor board, grass cloth wallpaper, marble tabletops and pops of color amid clay tiles and wood tables, the 1,300-square-foot space caters to shoppers who appreciate both quality fashion and an “old New York” aesthetic.

Unsubscribed first opened in East Hampton, N.Y., followed by Palm Beach, Fla., Westport and Greenwich in Connecticut, and an e-commerce launch. Each physical location boasts a unique assortment from local artisans. The Madison Avenue store offers a curated assortment of exclusive styles from existing brand partners like Melissa Joy Manning, Bleecker & Prince and Octavia Elizabeth.

Unsubscribed maintains a strong focus on sustainability, opting for a delivery schedule that’s seasonal rather than monthly. It also carries vintage and recycled products and focuses on social and ethical fashion practices.

By adding more fuel to the Unsubscribed brand, American Eagle aims to reach its recently elevated financial goals for 2023, which include revenue of $5.8 billion, up from $5.5 billion. Operating margin goals will raise from 10 percent to 13.5 percent. The new goals were set earlier this year following a successful holiday season that helped it surpass its 2023 goal of $550 million in operating income two years ahead of schedule.

By Zofia Zwieglinksa | Link to article

In April, Snapchat announced new features for its AR brand platform, including tools to quickly create more accurate 3D assets and expanded AR try-on through its Dress-Up section. American Eagle, one of Snapchat’s beta testers, has been expanding its AR product assortment in step, to target its core Gen-Z consumers with the goal of scale during the back-to-school season.

“In our pilot program, our jeans try-ons were saved or shared 100% more times than typical Snap benchmarks. People really like to try on clothes in augmented reality that more closely form their body type,” said Craig Brommers, CMO of American Eagle.

One of the key features Snap launched last month is AR clothing try-on, where clothing images are placed onto full-length photos of users. The digital clothes are virtually adjusted to fit different sizes automatically, a feature previously not available with clothing filters. With a 30% retention rate on the platform, Snap is a valuable place for companies like American Eagle to get their customers familiarized with their assortment virtually. 

“[AR try on] is becoming something that we’re going to launch in a more aggressive way as we head into the summer months. You will be able to try on a pair of American Eagle jeans or a T-shirt and it will look more closely like a true try-on experience in the physical world,” said Brommers. Previously, Snap has been testing accessories like shoes and eyewear in AR try-on, but clothing is a far more complicated endeavor. Snap has addressed this through deep learning technology. 

“Snap processes a look with this new deep learning module approach that can segment out the garment from the model in the photograph. By training our deep learning models with hundreds and thousands of images, we know how to simulate what that garment should look like on anyone,” said Carolina Arguelles Navas, Snap’s global AR strategy lead.

One of the main challenges that has come up for American Eagle during the pandemic is an accelerated return rate, which it hopes AR try-on can solve. While American Eagle declined to share its return figures, return rates across the fashion industry are rising, with an average rate being 16.6%. According to a survey by the National Retail Federation and predictive analytics company Appriss Retail, that rate is up from 10.6% in 2020. The problem of returns demands multiple solutions. Zara, for example, announced this week that it will now charge a small fee ($2.43) to online customers for returns, a first for the company that first entered the U.S. online market in 2011.

Others, like American Eagle, see AR technology as a solution. Brommers said, “How much better of an experience could it be for the customer if you could better replicate that physical try-on experience in the digital world? If you shave even a few percentage points off that retail return rate as a result, you’re talking hundreds of millions of dollars saved for companies.”

With Snap’s new clothing try-on, this means users will be able to see what the clothes on the website will actually look like on their body type. The growth of fit technology like this is becoming more prevalent, with brands like Savage x Fenty and Khaite piloting fit tech programs.

Snapchat’s new Dress-Up tool will also enable discovery through an AR-enabled Pinterest-style format. There, users will be able to try-on filters and digital fashion garments alongside items sold by brands. “Over the past year alone, 250 million Snapchatters have virtually tried on products 5 billion times. People are talking about digital fashion and try-on as the future of shopping, but this is already a huge daily behavior today,” said Navas.

With so many social media platforms reporting dropping user rates, AR filters are keeping users engaged on platforms. Research shows that people who use AR Filters use them for 75 seconds, on average. That’s four-times longer than the average time they spend watching a mobile video, which is still a more common marketing strategy among brands. 

For Brommers, the development of American Eagle’s virtual presence on Snap is a way to reach Gen-Z customers on the app and convert that existing behavior into sales. 

“We launched a virtual pop-up in augmented reality [on Snapchat], and it’s been driving millions of dollars worth of sales. If this is another iteration where the customer can virtually try-on and fall in love with her pair of jeans and buy with a click, there’s a commercial opportunity here. It’s not just about a fun experience,” he said. The brand will be expanding its AR product range to include jeans and women’s T-shirts and hoodies, beginning in July.

By Shelley E. Kohan | Link to article

A new charter was announced by Sephora and Open to All, a nonprofit coalition of over 200 members, to mitigate racial bias in retail and create more welcoming environments for shoppers and employees. The goal of the charter is to bring retailers together to implement actions and create best practices that can address the issues prevalent in the shopping journey for many BIPOC customers and workers.

Racial bias in retail study

In 2019, Sephora commissioned a first-of-its-kind study on the state of racial bias in the retail sector and the study findings were shared across all retailers. In my interview with Jean-Andre Rougeot, CEO of Sephora, he discussed how the retail experience is a challenge for many customers due to racial bias, and when he listened to actual shoppers in the focus groups as part of the study, it was very emotional. “I remember one Black woman was saying how she had to be a different person when she went shopping, she had to dress and behave differently. No one should ever have to feel this way, every consumer should be comfortable walking into any store and shopping,” said Rougeot. The focus group stories were just heartbreaking and Sephora wanted to learn from these experiences along with the commissioned research from the experts.

Rougeot stated, “This type of behavior should not happen in America or any country, and we want to do something about it both internally and from an industry perspective.” Sephora’s goal was to share the results of the study and formulate action items to improve the industry in terms of creating more welcoming environments for shoppers and employees.

When Terry Roberts, chief inclusion and diversity officer of American Eagle Outfitters, read the Racial Bias in Retail Study commissioned by Sephora, he was dismayed to hear about how a particular BIPOC customer literally comes up with a game plan to go shopping. “When I read about shoppers making a plan to go shopping so they feel more welcome, it was really disappointing. I then realized that I do the same thing, dress a certain way so sales associates treat me differently. I don’t do that anymore.”

Roberts talked about how there is a divergent perception of how customers feel when shopping and about the retail workers’ perception of the service provided. What AEO and other retailers can do is close the gap between the perceived service and the actual service delivered. “Through this charter, AEO wants to work both sides of the equation and create an environment where shoppers feel welcomed and empowered in a trusted environment with retail workers.”

Joanne Crevoiserat, CEO of Tapestry (parent company of Coach, Kate Spade, and Stuart Weitzman), said, “There has never been a more urgent time for us to demonstrate our commitment to inclusivity, be it the political landscape, customer expectations, or simply our belief in protecting equality and equity for all.” Crevosierat discussed how Open to All’s mission closely aligns with Tapestry’s core values, one of which is to embrace difference by design. “We believe we do our best work when we are able to champion diversity at all levels of our organization and build a culture where all of our employees are empowered to bring their whole, authentic selves to work and our customers always feel welcome.” Tapestry’s goal, much like the goal of Open to All, is to build a truly inclusive environment where people from all backgrounds, perspectives and experiences can thrive.

The barriers to creating change

Rougeot discusses that there are really two facets that should be considered when addressing racial bias in retail. Making consumers feel uncomfortable in stores is obviously wrong from an ethical perspective but it also makes no sense from a business perspective in the U.S. since the diversity of consumers in the U.S. market is so broad.

“At Sephora, we are lucky to have a very impassioned team that works on creating opportunities of inclusivity every day across all teams.” Every employee in the company has a DEI (diversity, equity and inclusion) objective on their review and while it varies by position, everyone gets it and workers now come up with very creative ways to add goals that further our DEI mission.”

Even before the Open to All charter, Sephora was a leader in highlighting the issue of systematic racism in retail, with its programs like the 15% Pledge and Sephora Accelerate. “Through the Open to All Mitigate Racial Bias in Retail Charter, we can make real progress as more retailers get on the train; we can continue allocating resources and addressing the issue.” Rougeot believes that racial bias in retail is a fundamental issue for the future of the industry.

Roberts says, “Bias is not good for business and I have a hard time thinking of any retailer today that wants to foster this type of environment.” Employees spend a lot of time at work and AEO counteracts the broader environment by bringing awareness to unconscious bias through daily conversations and training and wants to be a part of the bigger picture in terms of making progress in the industry.

Crevoiserat adds that because of the unconscious nature of racial bias and microaggressions in retail environments, many of these actions are underreported, hard to prove and often not validated. “​​At Tapestry, we’ve focused on mitigating potential bias through store leadership training, tools and resources to increase awareness and manager capabilities.”

How it all came together

Calla Rongerude, Director of Open to All, discussed how the company is a national nonprofit nondiscrimination program that promotes the notion that everyone should be welcome regardless of race, ethnicity, national origin, sex, sexual orientation, gender identity and expression, immigration status, religion, or disability. The goal of Open to All is to advance diversity, equity, and inclusion initiatives by partnering the nonprofit with the private sectors to create positive change.

The Mitigate Racial Bias in Retail Charter pledges to design and implement actions that reduce racial bias in the shopper experience and foster inclusive shopping experiences for all, regardless of race or ethnicity; it stresses that retailers should be accountable to their shoppers, their employees, and the industry they represent; they should work together to drive change across the U.S. retail industry.

Rongerude said, “Last year, we debuted our Inclusive Retail initiative, working with our retail partners to create resources, training materials, and sample policies to ensure everyone is welcome. Addressing racial bias in retail is a natural progression of our Inclusive Retail work. We feel a duty to act and develop a set of tools we can use to collaborate with retailers, supporters, and nonprofit partners nationwide and do the work to ensure a welcoming culture for all shoppers regardless of their race.”

Collaboration creates greater action

The charter already has major retailers that have signed up to be part of the change alongside Sephora including American Eagle Outfitters (AEO), Coach, Tapestry, Levi’s, Kate Spade, Dick’s, Ben & Jerry’s, H&M, and Zara’s.

AEO has been at the forefront of inclusivity and would be considered one of the pioneers in the space of access for all. In my interview with Roberts, he discussed the importance of the Open to All charter because it brings all communities together for the greater good of the industry. “At AEO, we have these customers and we want them to come into the stores and be their authentic selves; it’s something that we as a company always talk about.”

Roberts also discussed how the Open to All organization is great to work with and they are focusing on the right things. “We are very hopeful that access for everyone becomes an industry-wide initiative; The notion that everyone gets to participate including shoppers, customers and employees is very important.”

Roberts explained that every brand should be true to itself regarding its own values and mission, but the power of all of these brands coming together, even competitors, creates a larger benefit to the industry. “ Inclusivity should become more normal across all retailers, and while this has been a competitive advantage for AEO, we really want this to be the norm for all shoppers and employees.”

Crevoiserat discussed how some issues are far too big for one company to tackle alone. In this instance, the industry can collaborate to ensure it builds an equitable, inclusive, and diverse world. “Together, we have a greater chance of driving real, measurable change.” Crevoiserat talked about how by partnering with other brands to collectively support and sign the “Mitigate Racial Bias in Retail” charter, Tapestry is sending a message that it will not stand for discrimination. “Together, we are standing up for the rights of our customers, our employees and our partners.”

Best practices shared among retailers

The charter includes the development of resources and education including training materials, and Rougeot discussed that while Sephora has exceptional training programs, its goal is to participate in the charter from a humble perspective. “The charter starts with acknowledging that we have a problem and it is not a competitive story, it is about sharing our training but also seeing how other retailers approach the issue.” There is a collective power when retailers pull together and the industry can really make a difference by working together.

Holding the retail industry accountable

According to Rongerude, Open to All will host monthly meetings for all Charter supporters, with guest speakers presenting on a wide array of topics. “Thanks to the generosity of one of our corporate partners, we will open-source a two-hour anti-racism training developed by Mattingly Solutions, a DEI consulting firm focused on workplace inclusion at the end of May. That will be available to all companies that sign the Charter.”

Tapestry plans to hold itself accountable. Crevoiserat said that part of this plan is exploring ways to drive systematic change by increasing opportunities for people with diverse backgrounds at all levels of their career, from the talent pipeline to internal opportunities for mobility, to pathways to senior leadership roles. Tapestry is a founding member of Fashion Institute of Technology’s Social Justice Center, which is focused on advancing equity and opportunity in the fashion industry to effect real and lasting change. Earlier this month, Tapestry appointed David L. Casey as chief inclusion and social impact officer, a newly created position that reflects the purpose-led, people-centered philosophy. In addition, Crevoiserat said, “It advances the ongoing commitment to building Tapestry’s inclusive culture and creating a company that truly reflects the diversity of its customers, its employees, and the communities it serves.”

Retail’s future

When asked about the success of the charter five years down the road, companies responded with the hope of great change. Here’s what some of them said:

• Rongerude (Open to All): “Five years from now, I hope that most or all of the retail industry will be actively participating in this work. And it is my greatest hope that BIPOC shoppers feel welcome and respected every time they shop.”
• Roberts (AEO): “Success would be when everybody’s included, there are no preconceived notions and beautiful is everyone. By doing more with best practices from others, more training and working on the charter together, we can pay it forward. There is no ego here.”
• Crevoiserat (Tapestry): “We feel it is critically important for Tapestry to have continued access to quantitative and qualitative data that will enable companies like ours to drive focused efforts on specific areas of opportunity and measure progress. Sephora’s Racial Bias in Retail study is one example of data that drives accountability and provides a burning platform to address problem areas. Our consumers and our people will tell us if we are succeeding.”
• Sephora’s continued focus on DEI initiatives has made a strong impression on customers. Rougeot said, “Consumers are telling us they love the product diversity in the store and we view this as a marathon and not a sprint. We need to work hard and not let up because if you relax, it can go backwards.”

By: Kellie Ell | Link to article

Each store in the slow retail brand’s fleet is curated to include items specific to that area.

Unsubscribed is moving to Manhattan.

The slow retail brand — part of the American Eagle Outfitters family — is opening its first retail store in New York City on Thursday. 

“New York City is a flagship destination and we just found this stellar location,” Jennifer Foyle, president and executive creative director of AE, Aerie and Unsubscribed, told WWD. “We knew that the product categories were right in the mix and the concept was right for this location. And we believe that there is still a demand for customers and experiences. There’s no question in my mind that there are still consumers out there who still want a beautiful retail experience and a shopping experience. And that’s what Unsubscribed is here to do. We want to please our customers who come into our brand.

“It’s a perfect little gem,” continued Foyle, who will be on location Thursday morning at 1190 Madison Avenue on Manhattan’s Upper East Side for the grand opening. “I cannot wait to cut the ribbon.”

The 1,300-square-foot space has Bespoke Patina mirrors, brass chandeliers, a vintage-inspired checkered floor board, grass cloth wallpaper, marble tabletops and pops of color amid clay tiles and wood tables, all to invoke a feeling of shopping in old New York.  

“And there are some cute little nods to New York City and that location,” Foyle said, although she declined to say what. “You’ll see. I just can’t share everything [before the opening].”

This is in fact part of Unsubscribed’s ethos. Each of the brand’s five locations — starting with East Hampton, N.Y., which opened in summer 2020, followed by Palm Beach, Fla., Westport, Conn., Greenwich, Conn. and now New York City — includes an assortment specific to that area, such as items by local artisans. 

“Every store feels different; each store feels defined by the location,” Foyle explained. “But we’ll always have some of our signature collection, because we believe to build a brand properly we always need signature categories, such as our washable silks and recycled cashmere. 

“But our concept in Unsubscribed — while we love the build-outs and we love the fixtures and we love the beauty of the spaces — we really want the product to sing,” she continued. “We want to make sure that when you enter our stores you see the product first. And then comes the beauty of the atmosphere.”

That product is what Foyle describes as “slow fashion” — or the opposite of fast fashion. Products that last longer and place greater emphasis on the production process. To do this, the brand, which launched an e-commerce site last August, slowed down its deliveries to seasonal, rather than monthly, which helps reduce its carbon footprint. Unsubscribed also tries to carry products that include some element of sustainability. 

“By no means are we 100 percent sustainable. But we have our eyes on that target,” Foyle said. “Certainly, there is a lot of mention about ESG and sustainability. It’s a big conversation in retail today and we believe this brand can participate. We love this concept of slow retail, not doing everything fast and furious. So certainly Unsubscribed is an avenue to do so and a brand that allows us to test and scale. 

“This is a little bit of a higher-end concept for our portfolio,” she said, adding that Unsubscribed’s core demographic is slightly older (partially because of the elevated price points) than that of the AE, Aerie, Todd Snyder and Offline brands, which tend to attract the Gen Z and Millennial crowds. “But because it’s a smaller operation, we can take some risks and learn. And when we learn from this smaller concept, we can apply it to our bigger brands.”

Foyle wouldn’t divulge details regarding the brand’s financials, but did say she’s pleased with the results thus far. “We wouldn’t be opening up [a store on] Madison Avenue if we didn’t like what we saw.”

She added that Unsubscribed may expand with more stores in the future, but for now will concentrate on the current fleet. 

“We’re going to grow at a very slow and steady pace. We want to learn with these five stores as of right now,” Foyle said. “The beauty of this is that it’s a small concept, so we’re very flexible. We’re always open to new ideas and new spaces. Certainly, there’s opportunity to grow the digital channel. But right now we’re really focused on stores and engaging new customers and just delighting them every day.”

Each year, AEO honors one associate who has achieved significant accomplishments, personifies our values and who has left an indelible impact on our company and people. This marks the last of our spotlights on the top three finalists for the 2021 AEO ICON.

AEO is proud to introduce Mat, Manager, Product Management and 2021 AEO ICON Finalist! In his role, Mat is an innovative and strategic technology partner who manages shared services product initiatives and projects.

Mat joined AEO in February 2020, approximately one month before the company pivoted to a hybrid corporate workforce due to the COVID-19 pandemic. Since then, he has been dedicated to ensuring associates have the technology to effectively respond to the rapidly evolving future of work. Being a new hire didn’t stop Mat – he hit the ground running, quickly producing helpful aids for using Webex, VPN and other tools that allowed our teams a smooth transition to remote work. Mat is continually thinking of ways to improve the associate experience as the company continues to operate and adapt to new ways of working.

In late 2020, Mat conducted a comprehensive review of AEO’s productivity tools and led a cross-functional focus group before choosing Google as a solution to support our Future of Work initiative. He has led the company-wide shift to Google by interacting and collaborating with teams who oversee AEO’s technical integration, change management/communication, legal/policy changes, subcontracting and more.

Beyond Google and Webex, Mat established the product management team and implemented processes within shared services that simplify how we work and how others work with the Technology department. He has done all of this in a manner that exemplifies our values – People, Passion, Integrity, Innovation and Teamwork –  while effectively supporting our company strategies.

Outside of AEO, Mat is a family man and music lover. He is involved in a variety of organizations and professional alliances, including the Product Marketing Alliance, the Scrum Alliance, and the Allegheny Allies – an employee resource organization dedicated to building a more diverse Pittsburgh region. However, what he’s really dedicated to is finding a way to eat more brunch and hear less Nickelback on the radio!

Thank you, Mat, for your leadership and contributions to AEO! Congratulations on your nomination!