American Eagle launching new children's line

(Adds background, details on Martin & Osa and outlook)

NEW YORK, Jan 17 (Reuters) - American Eagle Outfitters Inc (AEO.N) said on Thursday it will launch a new children's apparel brand, called 77kids by american eagle.

The retailer said the line will include clothing and accessories for children ages 2 to 10. The brand will launch online at www.77kids.com later this year, with U.S. stores planned for 2009, it said.

American Eagle's namesake chain, which has over 850 stores, sells colorful, casual apparel targeted at young men and women ages 15 to 25.

The company has been successful with its aerie line of intimates and lounge wear for teen girls, whereas its 19-strong Martin & Osa chain, geared to adults, has crimped profits.

But Chief Executive Jim O'Donnell said on Thursday that the company has no plans to shutter Martin & Osa, which targets men and women ages 28 to 40.

American Eagle also said it expects 2008 earnings to grow 15 percent, in line with its long-term target.

(Reporting by Nicole Maestri and Martinne Geller, editing by Mark Porter, Phil Berlowitz)

((Reuters Messaging: nicole.maestri.reuters.com@reuters.net; +1 646 223-6173)) See here for "Shop Talk" -- Reuters' retail and consumer blog. Keywords: AMERICANEAGLE/

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