The platform’s most followed user, Charli D’Amelio, launches #AerieREAL Positivity challenge

By Kaila Mathise | Link to article

As stay-at-home orders forced businesses around the world to close their doors, everything from dinners with friends to professional conferences moved online. And with brick-and-mortar stores shut, brands were forced to do the same: connect with consumers virtually.

For Aerie, the American Eagle Outfitters-owned intimates, swim and leisure brand, that came in the form of the #AerieREAL Positivity challenge on TikTok. The challenge asks TikTok users to create a video sharing three things they’re grateful for in quarantine. Since its launch on April 15, the videos created as a part of the challenge have racked up over 2 billion impressions and an average increase of 855% in site traffic to Aerie.

Stacey McCormick, senior vice president of marketing at Aerie, said the idea was born from customers sharing stories with the brand on their own about how they were remaining positive and hopeful during quarantine. The Aerie team felt these stories represented its values of “body positivity, self-love, empowerment and community.”

“TikTok was the ideal platform,” she said. “Its content is historically rooted in fun, levity and an innate human goodness.”

The Aerie team worked with its agency of record, Shadow, to turn the brand’s “positivity mission into a TikTok-native format, a challenge.” Aerie even created an original song, called 100% Real Love by PopUpGirl, to go with it.

The challenge kicked off with a post from TikTok’s most-followed user, Charli D’Amelio, who earned almost 4 million likes from her 51 million followers on her #AerieRealPositivity video. It spread through the social media app thanks to submissions coming from the #AerieREAL lineup of spokespeople—known as Role Models—including DJ and wellness advocate Tiff McFierce, sustainability activist Manuela Barón, and Paralympic snowboarder Brenna Huckaby.

By the end of the first week, the campaign had over 1.3 billion views, and Aerie’s TikTok account grew from zero followers to 15,000.

The brand’s reach beyond TikTok grew as well. In one weekend, the brand gained over 16,000 followers on Instagram. Visits to the brand’s site were up, too, with the #AerieREAL Life homepage seeing 138,000 pageviews in one day.

It’s helped Aerie to weather the pandemic, which has brought challenges across the industry. Aerie’s global brand president, Jen Foyle, said the campaign contributed to a quarter that was already “nothing short of spectacular” following “21 straight quarters of double-digit sales growth.” Digital sales increased 75% during the pandemic, and there was a “double-digit increase for Aerie’s total business,” she added.

Aerie sees TikTok as the perfect way to continue connecting with their community regardless of whether stores reopen. It allows customers to be themselves and find positive content that inspires and excites them, and it creates a space for brands like Aerie to be a part of that excitement.

“TikTok can seem intimidating to new users with its many functions and editing tools, but sharing positivity is actually easy and fun,” McCormick said. “We love it and will continue to activate it.”

Other brands including Hero Cosmetics, Fenty Beauty and Gucci also use TikTok to market their products and connect with consumers. Hero Cosmetics uses the platform for everything from customer reviews to product launches and, recently, social justice commentary. Fenty Beauty directly posts videos of costumers using its products, often accompanied by discount codes for viewers, and Gucci engages followers with #GucciBeauty, which encourages users to show off how they use their makeup on their own pages.

Going forward, Aerie plans on continuing to utilize TikTok as both a platform to reach customers and as a way to grow closer with and build the Aerie community. This summer, the brand will highlight its swim collection with a new challenge called “Build Your Own Beach,” where users show off their Aerie beachwear at home. It kicked off May 21 with a post from Jessica Alba and her daughter, Honor.

“We have continued to build on not just the success of this individual campaign, but on the community we have created,” McCormick said. “We do that by exploring new ways to share what makes Aerie special.”

Digital demand accelerated, fueled by brand health and strong customer engagement

Aerie’s brand momentum continues

Early adoption of best-in-class health and safety measures for associates and customers

Fortified balance sheet provides foundation as AEO prepares to emerge with strength

PITTSBURGH — (BUSINESS WIRE) – American Eagle Outfitters, Inc. (NYSE: AEO) today reported EPS of ($1.54) for the 13 weeks ended May 2, 2020.  This compared to $0.23 for the 13 weeks ended May 4, 2019.  Adjusted EPS of ($0.84) this year excluded $0.70 of impairment and restructuring charges discussed below and compared to adjusted EPS of $0.24 last year, which excluded $0.01 of restructuring costs.

Jay Schottenstein, AEO’s Chairman and Chief Executive Officer commented, “In the midst of this unprecedented crisis, the strong character of our company and associates has been apparent.  I’m extremely proud of the team’s agility and humanity as we have taken immediate actions to ensure the health and safety of our people, preserve financial strength and prepare AEO for a new future.  Store closures and aggressive inventory liquidation had a significant impact on our first quarter financials.  Yet customer engagement remained high and digital demand accelerated, well-exceeding our expectations.  Aerie’s performance was truly exceptional despite store closures.”

“I’m very pleased to see stores re-opening strong, supported by industry-leading health and sanitization measures to ensure safe and secure stores for our associates and customers.  American Eagle and Aerie will be well-positioned for the back-to-school and fall seasons.  We will offer compelling new collections and deliver the best customer experiences.  AEO entered this crisis with a strong balance sheet and two of the most recognized, trusted and loved brands.  Recent liquidity measures will protect our financial strength and enable us to continue to invest in our business, further solidifying our competitive position.  We view this moment as an inflection point to accelerate strategies to emerge stronger, leaner, and more agile to effectively win in a post-COVID-19 world.”

Adjusted amounts represent Non-GAAP results, as described in the accompanying GAAP to Non-GAAP reconciliations.

First Quarter 2020 Results

 Total net revenue for the 13 weeks ended May 2, 2020 decreased $335 million, or 38% to $552 million compared to $886 million for the 13 weeks ended May 4, 2019.

• By brand, American Eagle revenue decreased 45%, following a 5% increase last year. Aerie’s revenue decreased 2%, following a 28% increase last year.
• The company’s digital demand, as measured by ordered sales, increased 33%. Aerie rose 75% and AE increased 15%.  First quarter digital reported revenue was up 9%, reflecting strong demand, partly offset by temporary delays in fulfillment that led to higher than normal DC backlogs.  The company has since reduced backlogs from mid-April peaks.
• Gross profit of $28 million compared to $325 million last year. The gross margin rate of 5.1% compared to 36.7% last year.  The gross profit dollar decline primarily reflected the reduction in store revenue, markdowns and promotions to clear through AE spring and summer goods, and $60 million in inventory provisions.  The company also experienced buying, occupancy and warehousing pressure as a rate to revenue, due to the sales decline.
• Selling, general and administrative expense of $188 million decreased $43 million from $231 million last year, primarily due to lower store operating expenses during closures.
• Depreciation and amortization expense of $43 million decreased $2 million from $45 million last year.
• Operating loss of $358 million compared to income of $48 million last year. Adjusted operating loss of $203 million this year excluded $156 million of impairment and restructuring charges and compared to adjusted operating income of $49 million last year, which excluded $1.5 million of restructuring charges.
• EPS of ($1.54) compared to EPS of $0.23 last year. Adjusted EPS of ($0.84) excluded $0.70 of impairment and restructuring costs and compared to adjusted EPS of $0.24 last year, which excluded $0.01 of restructuring costs.

 Impairment and Restructuring Charges

In the first quarter of 2020, the company incurred impairment and restructuring charges of approximately $156 million pre-tax, or $0.70 per share after-tax, primarily reflecting impairments of 272 stores due to COVID-19-related store closures.  In addition, the company impaired certain corporate and other assets and incurred restructuring charges. In the first quarter of 2019, the company incurred restructuring charges of $1.5 million pre-tax, or $0.01 per share after-tax.

Inventory

Total ending inventory at cost decreased $34 million or 8% to $422 million.  The company continues to clear through AE spring and summer merchandise to position both brands for new back-to-school collections in late July.  Inventory optimization initiatives currently being implemented will streamline assortments, provide greater alignment of inventory to sales plans and better utilize supply chain strengths to chase product demand.

Capital Expenditures

In the first quarter of 2020, capital expenditures totaled $34 million.  In order to preserve financial liquidity in response to COVID-19, the company has reduced its fiscal 2020 capital spending plans to a range of $100 to $125 million, prioritizing strategic customer-centric and supply chain investments aimed at further strengthening its competitive position.

Shareholder Returns, Cash and Investments

To preserve liquidity, the company has suspended its second quarter dividend and at this point does not anticipate declaring a dividend for the rest of this year.  As previously announced, the company’s first quarter cash dividend was deferred until 2021 and will be payable on April 23, 2021 to stockholders of record at the close of business on April, 9 2021.  Early in the first quarter of 2020, the company repurchased approximately 1.7 million shares for $20 million.  The company ended the quarter with total cash and short-term investments of $886 million, an increase from $350 million last year, due to $406 million in proceeds from the recent convertible notes offering and $330 million in borrowings from its revolving credit facility.

 Health and Safety

In response to COVID-19, the company has taken numerous actions to protect associates and customers, including:

• Hiring a medical consultant to advise leadership on health and safety best practices
• Instituting work from home in mid-March, ahead of stay-at-home orders
• Providing masks, gloves, thermal temperature scanners, staggered schedules, social distancing protocols and nurses on site at all distribution facilities
• Implementing best in class protocols in re-opened stores, including a sanitization station and masks for all customers, plexiglass health guard partitions at registers, enhanced cleaning routines and protocols and marketing to encourage social distancing
• Extending temporary store closures in regions where state and local governments have not yet lifted stay-at-home orders

Additional Actions Taken in Response to COVID-19

The company has taken the following additional actions in response to the COVID-19 crisis:

• Suspending its share repurchase program, deferring payment of the first quarter 2020 cash dividend and suspending its second quarter 2020 cash dividend
• Temporarily furloughing store, field and corporate associates beginning April 5, while continuing to pay health insurance premiums for all furloughed associates
• Cutting inventory receipts to align with lower demand due to store closures
• Reducing operating expenses, including suspending merit increases for associates, implementing a hiring freeze and other cost saving initiatives
• Reducing capital expenditures across stores, information technology and other projects
• Borrowing $330 million from its $400 million revolving credit facility and issuing $415 million convertible notes due 2025

 Conference Call and Supplemental Financial Information

Today, management will host a conference call and real time webcast at 9:00 a.m. Eastern Time. To listen to the call, dial 1-877-407-0789 or internationally dial 1-201-689-8562 or go to http://www.aeo-inc.com to access the webcast and audio replay. Additionally, a financial results presentation is posted on the company’s website.

Non-GAAP Measures

This press release includes information on non-GAAP financial measures (“non-GAAP” or “adjusted”), including earnings per share information and the consolidated results of operations excluding non-GAAP items.  These financial measures are not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“GAAP”) and are not necessarily comparable to similar measures presented by other companies.  Management believes that this non-GAAP information is useful for an alternate presentation of the company’s performance, when reviewed in conjunction with the company’s GAAP financial statements.  These amounts are not determined in accordance with GAAP and therefore, should not be used exclusively in evaluating the company’s business and operations.

* * * *

 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 2020 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 the company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 and in any subsequently-filed Quarterly Reports on Form 10-Q filed 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 the second quarter 2020 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: our inability to respond to changes in e-commerce and leverage omni-channel demands; risks associated with pricing pressure; the ongoing impact of the coronavirus  (COVID-19) pandemic on global economic conditions, our customers’ discretionary income, freedom of movement, and the related impacts to  our operations and financial results, which are difficult to accurately predict; the possibility that we may be required to take additional store impairment charges; the risk that we may not achieve our business priorities and strategies; our inability to anticipate and respond to changing consumer preferences; the seasonality of our business; our inability to achieve planned store financial performance; risks related to international merchandise sourcing and foreign trade, including supply chain issues and increasing pricing for raw materials; risks related to store openings and potential closures; our inability to gain market share in the face of declining shopping center traffic; risks associated with leasing substantial amounts of space;  risks relating to our efforts to expand internationally; challenges with information technology systems, including safeguarding against security breaches; and other changes in global economic and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, all of which could have a material adverse effect on our business, results of operations and liquidity.

To Our AEO Family:

We will not shy away from acknowledging the pain, confusion and anger that so many of us are feeling following the death of George Floyd, and those that have died before him.

Racism is an ongoing, systemic threat to our communities. It has no place in this world. We recognize that racial inequality exists all around us and we stand with our Black, Indigenous, and People of Color (BIPOC) associates and customers just as we have stood with all those that have faced hatred or persecution for what they believe or who they love.

We see you. We hear you. We support you. We are committed to REAL change with you.

We will continue to do our part to lead with purpose, inspire others to use positive actions rather than violence, break down racial inequalities and be part of the solution. We are not new to this fight. Since 2018, AEO has created an Inclusion and Diversity Alliance and partnered with the Anti-Defamation League to combat prejudice and bigotry through the No Place for Hate school-based program. With discrimination on the rise, we furthered our action in 2020 with substantial additional donations to organizations that promote understanding, kindness and love.

We have a responsibility to build a better world for our customers and our associates. We will not allow hate to defeat us in any of its forms. We will remain dedicated to supporting causes that uphold our values and make a lasting difference in the lives of those around us, like our work with The Pittsburgh Promise and Big Brothers Big Sisters Workplace Mentoring, among others.

We will also continue to support our associates, customers and communities through their battle with COVID-19, as many of our people continue to experience hardships due to a COVID-19 diagnosis, food insecurity or financial emergencies from the impact of the virus. In early May, AEO joined the pledge to be #OpenToAll to combat racial disparities and discrimination as a result of COVID-19. We will continue to step up and remain a leader in this space; keeping our people, our distribution centers and stores safe and secure while donating protective equipment and funds to those on the front lines and in need.

At AEO we celebrate the diversity of one, through the inclusion of many. We believe in a culture where everyone feels empowered and respected. As we continue to celebrate individuality, difference and equality, we invite associates to join our I&D Alliance and will remain committed to fostering conversations around race, equity and healing.

The time to do something is now. By taking action today, we can change tomorrow.

Jay Schottenstein
Executive Chairman of the Board and Chief Executive Officer

Macy’s announced Friday plans to reopen stores in the Pittsburgh region this weekend. American Eagle Outfitters and its sister store Aerie are reopening as well. Dick’s Sporting Goods began opening its doors last week.

They’re among the national retail names making the complicated calculations about which stores to unlock once states ease restrictions placed on businesses as part of the COVID-19 pandemic — but the openings have often come slowly and deliberately.

Western Pennsylvania’s move into the less-restrictive yellow phase of the state’s tiered reopening plan, for example, did not bring an immediate return of all the merchants to places like Grove City Premium Outlets or the Waterfront shopping center in Homestead. And department stores at enclosed malls didn’t rush to set up the cash registers, even though the rules allowed it because they have separate entrances.

“We have a list of not only what stores can open, but what stores will open,” said Andrew McLean, chief commercial officer for South Side-based AEO Inc., the parent company of American Eagle and Aerie.

The apparel company began reopening select locations on May 1 and has opened 435 locations in the U.S.

Retail executives from several chains have said that, while they may be eager to see shoppers return to pick up the latest in spring apparel or new home decor, it’s not as simple as flipping around the open sign.

AEO has a “control tower meeting” daily with its global asset protection team — store operators, real estate, and legal and communications teams, along with medical experts — to look at changing regulations state by state and even county by county.

The company brought in Dr. Joshua Schwarzbaum, as a medical consultant in March, to advise it on how to safely reopen stores for both workers and customers.

As part of its risk management plan, AEO had a pandemic response in place after the outbreak of SARS, another coronavirus, in 2002 and 2003.

“As with every plan, it’s a living, breathing document,” Mr. McLean said. “We’ve made adjustments as we’ve learned.”

The company was able to hone its response in the United States after responding to the COVID-19 outbreak at its stores in Hong Kong and operations in China earlier this year.

Macy’s said Friday that its stores would be available for in-store shopping, curbside delivery and in-store pick-up the Galleria At Pittsburgh Mills in Frazer, Monroeville Mall, Ross Park Mall, South Hills Village, The Mall at Robinson and Westmoreland Mall in Greensburg.

“We began reopening our stores on May 4 and, as of this week, have approximately 190 Macy’s and Bloomingdale’s stores open in their full formats,” said Jeff Gennette, chairman and CEO, in a performance update in May 21.

He said he expected another 80 Macy’s stores to open for Memorial Day weekend.

“We have enhanced health and safety standards across all of our stores and facilities. We are also offering curbside pickup in many of our locations, including some stores that remain closed to the public,” Mr. Gennette stated.

“We are closely watching consumer behavior as we reopen more stores, and we remain flexible as we navigate this crisis. We expect business to recover gradually.”

Kohl’s department stores has reopened about half of its locations across the country since May 4, including those in the Pittsburgh region.

“We have followed a set of criteria, including state guidelines, health data, store readiness and field insights to help us determine the timing of store reopening,” CEO Michelle Gass said in the company’s May 19 earnings call with analysts.

She vowed to be agile as conditions continue to change but said that when stores do open, they’ve been doing 50% to 60% percent of typical sales.

For those stores that are inside an indoor mall, it’s another hurdle. For indoor malls in Pennsylvania, only tenants with external entrances may open, as well as pharmacy or health care tenants with either interior or external entrances, according to the guidelines meant to curb the spread of the COVID-19 disease.

Once inside any store that opens, customers will find that browsing is going to be a different experience than it was even a few months ago.

Stores are removing displays and opening up the space to make it easier to keep distance from other shoppers.

American Eagle replaced the space at the front of its store where the retailer would showcase the latest hot items.

Instead, customers will now see a welcome station — complete with masks, gloves hand sanitizer and a clean mat to wipe their shoes.

So far, the retailer has opened its stores at Cranberry Mall in Butler County, Pittsburgh Tanger Outlets and Grove City Premium Outlets.

“We want to give customers a sense of normalcy but also a sense of safety,” said Mr. McLean of AEO.

And it’s starting to look like it paid off

By Madeline Stone | Link to article

• Curbside pickup has ramped up during the coronavirus pandemic. A 2019 analysis estimated that curbside pickup could be a $35 billion market by the end of 2020.
• Retailers who reported earnings this week said their rollout of curbside services helped sales while stores were closed. 
• Curbside helps retailers move through inventory and cut costs while promoting customers’ safety. 
• Visit Business Insider’s homepage for more stories.

As “nonessential” retailers temporarily closed their doors to help stop the spread of the novel coronavirus, many pivoted so that sales wouldn’t have to stop completely.

For many retailers both large and small, that meant leaning into curbside pickup.

Best Buy adapted its stores to a curbside-pickup-only model on March 22. CEO Corie Barry said in the retailer’s earnings call on Thursday that its US online sales were up 300% during the six-week period that Best Buy was operating curbside only. She added that almost 50% of those sales were attributed to curbside pickups.

Walmart, Target, Kroger, and Whole Foods have dedicated resources to scaling their curbside pickup services in recent years.

And, other retailers were already starting to roll out these services before the pandemic prompted them to launch them more quickly.

A March 2019 analysis by Cowen & Co. estimated that curbside pickup could be a $35 billion market by the end of 2020. It predicted that 25% of shoppers will have tried curbside before the end of 2020 — and this was before the novel coronavirus arrived.

It’s likely curbside services have been popular with shoppers in the pandemic era because they can provide a relative sense of safety and convenience. Shoppers don’t have to interact with others in stores, wait in lines to check out, or search aisles for the items they need.

But, as Neil Saunders, managing director of GlobalData Retail, pointed out in emailed comments, curbside pickup provides retailers with a number of other advantages.

“It kept many associates employed, prevented a pile-up of inventory in stores, and was a far cheaper option than delivering from central warehouses,” Saunders said, referring to Best Buy’s curbside strategy.

American Eagle Outfitters began to offfer curbside pickup as its stores were permitted to reopen in phases in May.

“Curbside pick-up is definitely more cost effective from a logistical standpoint. It does require additional care and attention from our in-store sales associates to execute,” AEO’s chief commercial officer Andrew McLean told Business Insider. “However we are committed to adapting to the needs of our customers and pride ourselves in providing an exceptional shopping experience no matter how our AE and Aerie customers choose to shop.”

Many states have allowed retailers to operate curbside pickup in the first phases of their reopening strategies, so sticking to this model also keeps stores in line with that guidance.

Stores are still a major asset 

Kohl’s was already testing curbside at a couple of stores before the pandemic hit. In the retailer’s earnings call on Tuesday, Kohl’s CEO Michelle Gass said it had rolled out the service to more locations in April, adding that it had seen “great customer uptake” so far.

The retailer said it also used its stores to fulfill a higher percentage of digital orders in the quarter.

“More than 40% of digital orders were fulfilled by ship-from-store and customer pickup during the first quarter, and this percentage was much higher in April, following the successful launch of store drive-up,” Gass said during the call.

The results also show how much of an asset retailers’ stores can be, even when they’re closed.

Many retailers, including TJ Maxx and its sister store Marshalls, that have had to close locations amid the pandemic are now resorting to discounting and other solutions to work through inventory that has accumulated in stores. Much of that inventory is now out of date as stores were initially closed in March.

But if retailers can offer pickup and use their stores to fulfill orders, they can potentially avoid the inventory problem while saving on costs.

“Retailers can leverage brick and mortar stores as mini distribution centers, and have no added costs in shipping while closing sales and moving otherwise stagnant inventories,” Wedbush Securities analyst Jen Redding told Business Insider.

Obviously, not all stores are suited to a curbside model. For locations inside malls, it’s tricky.

For stores that can roll out these services, however, it’s a “win-win for consumers and retailers,” Redding said.

American Eagle, Sephora and Best Buy are among the retailers reimagining their stores to make shopping faster, easier and safer

By Abha Bhattarai | Link to article

Tiara Show went to the mall last week in search of summer clothes — and a distraction from the pandemic that has kept her homebound since March.

But there were coronavirus reminders everywhere: A greeter at American Eagle told her masks were mandatory and offered her a disposable one. Inside, shelves had been pared down and rearranged, with jeans in one area, shirts in another. Every other fitting room was closed. After paying for her purchase — shirts, shorts and earrings — through a plexiglass divider, Show tore the receipt from the printer herself.

“Everything was so different,” said the 23-year-old from Missoula, Mont. “If anything, it made the virus feel more real.”

Across the country, stores are reopening to a changed reality. Retailers that have spent years trying to get customers to linger, in hopes they’ll buy more than they need, are reimagining their stores for a grab-and-go future filled with deliberate purchases. Gone, they say, are the days of trying on makeup or playing with toys in the aisles. The focus now is on making shopping faster, easier and safer to accommodate long-term shifts in consumer expectations and habits.

Apple is checking shoppers’ temperatures at the door. Best Buy is asking customers to shop by appointment. Macy’s and Nordstrom are doing away with beauty consultations and alteration services, while the Gap is closing off bathrooms and fitting rooms. Cosmetics giant Sephora won’t allow shoppers to test products anymore. Others are quarantining returns for as long as 72 hours before putting merchandise back on shelves.

American Eagle Outfitters, meanwhile, is reimagining every part of the shopping experience. It has invested in curbside pickup and infrared machines that measure customers’ temperatures as they walk by. Entryway displays once piled high with apparel have become “welcome tables” with bottles of hand sanitizer, disposable masks and sticky blue mats that clean shoe soles. Clothes are even folded differently, to encourage hands-off browsing. The new protocols, which already have been rolled out at 435, or nearly half, of its U.S. stores, offer a glimpse of how even the most innocuous interactions might be tempered.

“From the moment you walk into our store, we want you to see something that’s new,” said Andrew McLean, the company’s chief commercial officer. “The sticky mat, the welcome table — they’re all triggers in the customer’s mind that things are different now.”

The retailer, which now limits the number of people in stores, is using a mobile app to notify customers when it’s their turn to shop. And it has spelled out its new protocols in a 65-page employee handbook, including how to fold jeans and T-shirts to allow shoppers to examine them in detail without touching them.

The efforts illustrate the lengths to which retailers are going to reassure skittish consumers that it’s safe to shop in person again, even as U.S. coronavirus deaths surpass 92,000. The already bruised industry has been hit hard during the pandemic, as weeks-long shutdowns ushered the broader economy into recession. Four major chains — J. Crew, Neiman Marcus, Stage Stores and J.C. Penney — have filed for Chapter 11 bankruptcy protection this month, and a fifth, Pier 1, is headed toward extinction. And analysts say many more retailers are teetering toward bankruptcy, raising the stakes on their public health response.

“Experience has shown us that loosening restrictions and shelter-in-place orders means a resurgence of disease,” said Robert A. Bednarczyk, a professor of global health and epidemiology at Emory University’s Rollins School of Public Health. “Masks, temperature checks, hand hygiene — they’re all important as stores reopen, but there are still risks for increased transmission.”

Retailers have spent years adding interactive displays, sample stations, even rock-climbing walls and full-service bars to their stores in hopes of offering shoppers an experience they can’t get online. But analysts say many of those efforts are now impractical or unsafe, requiring an overhaul that could ultimately make the shopping experience less enjoyable and further cut into an already weak retail environment.

Many of the changes, they say, are as much about being overtly reassuring as they are pragmatic: If someone asks for a fitting room at American Eagle, for example, employees must disinfect door handles and fixtures in clear view of the shopper before allowing them in.

“Retailers are starting to consider more than just the cleanliness of their stores,” said Wendy Liebmann, chief executive of WSL Strategic Retail, a New York-based consulting firm. “They’re thinking about merchandising, about where things go. How can they make it easier for people to shop? This pandemic isn’t going to level off. It’s going to be a long roller coaster.”

At Child’s Play, an independent toy store in Washington, D.C., owner Steven Aarons is preparing for fewer impulse buys — and fewer children. He is removing play tables and replacing Pokémon cards and jacks with bigger-ticket items — such as 1,000-piece puzzles and scooters — that parents can quickly pick up.

“It feels like we’re starting a whole new business,” said Aarons, who opened the store 34 years ago. “It’s painful to say we’re going to take away the play tables and not let kids run around the store anymore, but it’s also the right thing to do.”

It could be years, he says, before customers feel comfortable spending hours browsing aisles with their children. In the meantime, he has built up the company’s website and added a delivery service that has been in high demand since the pandemic shutdowns began. Employees drop off about 60 orders a day from the company’s Chevy Chase store, though overall sales are down about 50 percent.

Pandora, a Danish jeweler that operates 375 stores in the United States, has moved its jewelry-cleaning machines from backrooms to the selling floor so that employees can sanitize each piece after it’s been tried on, in full view of customers.

Trying on jewelry comes with its own precautions. The retailer has created an elaborate system to ensure customers and employees don’t come into physical contact. Customers are instructed to stand three feet from store counters. If someone wants to try on jewelry, the employee takes the item out of the case and places it on a tray on the counter.

“The customer steps forward as the employee steps backward, so there’s always that six-foot space,” said Sid Keswani, president of the company’s North American operations.

The company also is limiting customers to five at a time and is developing new safety measures for the busy holiday season, which accounts for about 40 percent of its sales.

“We feel it’s a pretty safe journey,” Keswani said. “But I say pretty safe because, as you know, there are no guarantees right now.”

Data show a steady increase in foot traffic since malls began reopening this month. An analysis of eight shopping centers that opened May 1, including in Oklahoma, Tennessee and Georgia, shows that it went from a trickle — about one-fifth the number of shoppers a year earlier — to a quick acceleration that in some cases exceeded average daily rates a year earlier.

By May 6, Midland Park Mall in Texas reported a 79 percent jump from the day before, according to Placer.ai, which analyzes foot traffic patterns using location data from 30 million devices. Macy’s stores in South Carolina, meanwhile, saw traffic jump 9 percent from a year earlier.

It’s been a similar story at American Eagle, where shoppers returned cautiously at first, then with more gusto. Sales also are on the rise: Many reopened stores are selling as much merchandise as they were a year ago, according to Jay Schottenstein, the company’s chairman and chief executive.

“The customers who come in are coming in to buy,” he said. “They are not coming in to look.”

The company closed all 980 of its U.S. American Eagle and Aerie stores in March and furloughed the majority of its 40,000 workers. Reopenings began May 1, with a host of new guidelines created with help from doctors: Employees must wash their hands for 20 seconds at the beginning of each shift, then disinfect a store thermometer before taking their own temperature.

Alongside new protocols are more open-ended considerations. Employees are encouraged to smile from behind their masks and pay attention to nonverbal cues. “With masks on, you may feel a bit awkward at first, but don’t let that hold you up!” the employee manual says. “We don’t want this to feel like a sterile or clinical interaction. Even though you may be 6 feet apart — it’s your job to still create a connection!”

There are tutorials for do-it-yourself face masks, and a guide to creating badges that include a smiling picture of each employee. The goal, executives say, is to reassure customers in an era of pandemic shopping.

“This has been a two-month process of figuring out what it’s going to take to make people feel secure,” Schottenstein said. “It’s a new reality: Customers want to come back in, but they want to come back where they feel safe.”

Teen clothing brand AE is going to throw the first-ever virtual prom, complete with actor Jerry Harris serving as the emcee, Cash Cash serving as a DJ, and even surprise chaperones. There will be a mini dance lesson from TikTok celebrity Addison Easterling and guest performances by Tinashe and Addison Rae. (If you don’t know who these people are, you’re probably not in high school or college.)

And now, thanks to AE ( otherwise known as American Eagle), seniors can even go to prom. This event is designed to mimic the real thing, so friends can watch together and have mini dance parties in their own home. But there will also be a charitable component. The company has partnered with America’s Food Fund, Leonardo DiCaprio’s nonprofit that helps ensure people have reliable access to food. During the event, attendees will be able to donate and AE will match donations up to $100,000.

Last week, American Eagle announced the newest members of the AExME Council. This year’s group of young advocates and change-makers are building on the work of the 2019 Council, influencing ideas for the AE business and working together toward a better, more inclusive world. With some returning faces and some new, the Council welcomes Maya Penn, Schuyler Bailer and Mary-Pat Hector to the AE family.

Their voices — and the voices of young people just like them — will be turned into real action. The #AExMECouncil has and will continue to influence everything from the philanthropic initiatives AE supports to the stories we tell, and even ideas about how our business operates. The Council will help to design capsule collections, inspire social media content and plan and execute initiatives based on their personal platforms and passions.

To learn more about each council member and their platforms, visit the AE blog.

Meet the Council

Hand sanitizers, employee temperature checks, plexiglass barriers and cashless payment options will be the new norm as approximately 43 stores in 10 states reopen this week.

By Kellie Ell and Jean E. Palmieri | Link to article

American Eagle Outfitters is reopening for business in select locations — although for now, things will look a little different.

Hand sanitizers, face masks, employee temperature checks, open space, touchless payments, options for curbside pickups and other enhanced cleaning measures will be the new norm — as they are for most retailers that are reopening stores.

“People do want to go out, but they want to do it in a way where they feel safe,” Jay Schottenstein, executive chairman of the board and chief executive officer of American Eagle Outfitters Inc., told WWD. “When we closed the stores, we knew that when we reopened the stores, it wouldn’t be business as usual. We knew we had to do things differently than we had in the past. And the first thing we had to do was to figure out how we reopen the stores and protect our associates and protect our customers at the same time.

“The new in-store experience will be secure in making our customers feel safe,” Schottenstein continued. “As time goes on, we’ll give them other experiences as soon as everyone is able to start being close again. Hopefully, [social distancing] won’t last long. But we’ll have to have that flexibility though.”

The retailer opened about 43 stores this week — in Texas, South Dakota, North Dakota, Missouri, Arkansas, Florida, Tennessee, Georgia, South Carolina and Alabama — a mix of the American Eagle and Aerie brands, many of them in malls.

That’s just a fraction of the company’s 1,000-count store fleet. But Andrew McLean, chief commercial officer of American Eagle Outfitters, said the company is looking to open about 600 locations by the end of May.

To do that, McLean said his team has been investigating what the company needs to reopen ever since it temporarily shuttered stores in North America in mid-March. 

“Clearly, at the top of the list was health and safety, keeping social distancing,” he said. “But also, really creating a warm, bright and safe atmosphere; that was going to be critical. What it comes down to is that there wasn’t one thing that stands out that we’ve done. But rather there’s a series of small steps that add up that really connotes a safe environment from the moment you walk up to the store.”

The complete roadmap for reopening, however, is not so small. It includes fewer fixtures in stores to increase social distancing, plexiglass barriers between cashiers and customers, welcome stations in stores, providing free hand sanitizers and face masks and the option for curbside pickup if shoppers don’t want to enter stores.

Fitting rooms will also be cleaned each time a customer exits and shoppers will be asked to drop off the clothes they tried on in a box, which will be processed 24 hours later so associates don’t have to touch the items. A greeter at the front of the store will limit the number of people who can enter at once. McLean said the retailer is aiming for 200 square feet of space per person while in stores.

The company is also looking into testing associates for the coronavirus and is developing a band to be worn by employees that will track each person’s temperature through his or her shift.

Schottenstein added that — thanks to robust online sales during the shutdown in March and April, and the use of inventory from about 200 stores during that time to fill e-commerce orders — inventory throughout the stores will be fresh when they reopen.

“It’s not going to be old goods,” he said. “And I believe that we’ll be one of the few retailers in the country that when it comes to summertime, we’ll have all our fall goods be in place at the proper time, in July.

“I think the biggest thing is, stores should have responsibility,” Schottenstein said. “Whoever opens, if they open their stores, and they just open up like they were before, they’re not doing the country and the people a service. Those retailers that take the time to make sure that their people, that their associates are safe, that’s number one. At the same time, make sure it’s safe for your customers when they walk in. That’s the way business should be run.”

Meanwhile, Tailored Brands Inc., parent company to Men’s Wearhouse, is also preparing for the phased reopening of its fleet.

Late Thursday, the retailer said it expects to open about 300 Men’s Wearhouse, Jos. A. Bank and K&G stores in the U.S. by Memorial Day, in accordance with federal, state and local guidelines. The first stores will open this week in Georgia and Texas. In addition, the retailer is reviewing plans to open its Moores Clothing for Men stores in Canada.

Tailored Brands also plans to implement new safety measures when stores reopen, such as temperature checks for employees, the use of hand sanitizer and masks and social distancing protocols, including limiting the number of people in a store at once. All three chains will offer contactless payment, and Men’s Wearhouse and Jos. A. Bank stores will also offer curbside pickup.