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Aerie emerges as American Eagle's MVP — its "product/market fit" game is strong

Snacks / Thursday, March 05, 2020

Golden egg in the Eagle's nest... American Eagle enjoyed expectations-beating quarterly growth thanks to its teen-centric Aerie brand. Aerie is known for comfy basics from hoodies to bralettes (aka, loungewear). Now it has become American Eagle's golden growth egg. Fun fact: "aerie" means "the nest of an eagle...built in a high place" (we thought it related to breathable fabric). Then we jumped into American Eagle's numbers more...

  • +2% : AE's overall same-store sales growth for the quarter (that beat expectations)
  • -3% : How much sales of the AE brand were down
  • +26%: Aerie's impressive quarterly sales growththat surge single-handedly drove the bump in AE's same-store sales.

Aerie snuggled into sweet product/market fit... Its products satisfy a strong and growing market demand: Aerie's ad campaigns promote body-positivity, authenticity, and inclusivity, featuring non-supermodels (like scientist/CEO Keiana Cavé). This branding strategy — backed by in-depth studies/research on young women's preferences — has paid off:

  • Aerie's just notched its 21st straight quarter of double-digit sales growth.
  • 33 new Aerie stores were opened last year — compared to only 6 AE stores. And 70 more Aerie stores arrive in 2020.

Filling the Victoria's Secret vacuum... VS' sales have fallen because its brand of airbrushed models and extra-padded bras lost touch with customers (VS was recently sold off by its parent company). But the AerieREAL Role Models campaign features unretouched pics of female athletes, activists, and entrepreneurs, boosting sales significantly. The same shift in tastes that led to VS' sale/loss also led to Aerie's growth, positioning Aerie to take what Vicky missed.

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