AEO

American Eagle Outfitters CEO Departs Abruptly

In Industry News, Reports, What's New by Jeff PrineLeave a Comment

AEOPittsburgh—Barely two years since becoming chief executive at American Eagle Outfitters, Robert Hanson is leaving the teen retailer effective immediately, the company said Wednesday, adding that “the board and Robert decided mutually that it was best to part ways at this time.”

Assuming the CEO mantle on an interim basis will be Jay L. Schottenstein, the company’s largest investor and executive chairman of the board.

“The board will initiate a search for a permanent chief executive officer,” according to the company’s announcement. In the meantime, Roger S. Markfield, vice chairman and executive creative director, agreed to postpone his planned retirement until after a new chief executive is found.

Struggling to Regain Footing

Like other teen retailers in recent quarters, AEO has faced lagging sales as fast fashion retailers such as Forever 21 and H&M gain market share among young consumers.

AEO reported earlier this month that total revenue for the nine weeks ended Jan. 4 fell 2% and comparable store sales fell 7%.

In December, AEO called its third quarter “unsatisfactory” after its net profit plunged 68.3% as sales slumped. Net sales declined 6% to $857 million while comp sales were down 5%.

Only last week, Hanson told analysts at an investment conference that 2013 had been a difficult year with a rough macroeconomic climate. But he noted that AEO caused some of its own problems.

“The first thing we want to talk about was execution because we did not execute as we should have in 2013 and we would attribute at least half of our underperformance to weak execution,” Hanson said. “That’s across the assortment. Because in this business, product’s everything.”

Hanson, formerly global president of Levi’s brand before coming to AEO, has begun restructuring the retailer’s business to improve digital access, including announcing plans to close a distribution center in Warrendale in favor of a bigger, more e-commerce friendly operation near Hazleton. Many of Hanson’s other strategies wouldn’t have taken full effect until this year, analysts speculated.

“On behalf of the board of directors, I want to thank Robert for his contributions during his tenure and wish him well in his future endeavors,” said Schottenstein. “I look forward to working closely with Roger and our talented team to capitalize on the significant potential of our brands and to position the company for growth and long-term success.”

 

 

 

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