By Maria Ajit Thomas
Jan 22 American Eagle Outfitters Inc's
said its chief executive of two years, Robert Hanson, would
leave the company in a surprising move at a time when U.S. teen
apparel retailers are struggling to attract shoppers and boost
American Eagle's shares fell as much as 5 percent in trading
after the bell.
Analysts said Hanson's departure was all the more surprising
given that last week he attended the ICR XChange investment
conference for retail, apparel, restaurant and general consumer
"There did not appear to be any sign of impending change
when management openly interacted with investors last week,"
Piper Jaffray analyst Stephanie Wissink said in an email.
Hanson's departure comes as the company and its rivals
Aeropostale Inc and Abercrombie & Fitch are
facing intense competition from "fast fashion" chains such as
Sweden's H&M and Inditex's Zara, whose trendier and
cheaper clothes are resonating with young shoppers.
However, under the leadership of Hanson, American Eagle has
been faring a little better than its peers as it targets a wider
age group with more fashionable clothing.
"... Now in addition to fighting for customers, teen
retailers may well find themselves fighting for talent," Nomura
Equity Research analyst Simeon Siegel wrote in a note.
"Without a clear successor, it is interesting to note that
AEO will be looking for a new CEO at the same time that ANF has
begun its search for brand presidents for its Hollister and A&F
American Eagle said Executive Chairman Jay Schottenstein
would serve as interim CEO. Schottenstein was previously the CEO
of the company between March 1992 and December 2002.
HOLIDAY SEASON WOES
Hanson, who joined American Eagle in January 2012 after 23
years at Levi Strauss & Co, spearheaded a strong year for the
company by reducing markdowns and getting new product into
At the time, analysts lauded American Eagle's product
selection, which they said resonated with teens.
However, by mid-2013 the company and its rivals Aeropostale
and Abercrombie & Fitch had started to see teen shoppers
increasingly shift to the trendier and cheaper merchandise sold
at "fast fashion" chains.
The string of weak results were making investors impatient.
In December, an Abercrombie & Fitch shareholder urged the
company to replace CEO Mike Jeffries, saying the company needed
to chart a new course after seven straight quarters of
same-store sales declines.
However Abercrombie extended its CEO's contract by at least
The shortened 2013 holiday season added to the woes of the
three retailers, forcing them to discount heavily to attract
Earlier this month, American Eagle said comparable sales for
the fourth-quarter ended Jan. 4 fell 7 percent, while total
sales fell 2 percent.
At that time, CEO Hanson had said traffic and sales through
Christmas week were on the low end of the company's expectations
and, coupled with the deep discounts, were putting pressure on
margins and earnings.
American Eagle on Wednesday reaffirmed its earnings forecast
of 26 cents per share for the holiday season quarter.
The company also said Vice Chairman and Executive Creative
Director Roger Markfield would postpone his retirement and
continue in his current role.
The company's shares were down 4 percent at $13.77 in
extended trading. They had closed at $14.31 on the New York
Stock Exchange on Wednesday.