American Eagle Outfitters Swot Analysis
Join now to read essay American Eagle Outfitters Swot Analysis
American Eagle Outfitters SWOT Analysis
The Silverman family first founded American Eagle Outfitters in 1977. They operated specialty clothing stores under the name Retail Ventures. In 1980 the Silverman’s encountered financial troubles when the Schottenstein family bought out 50% of the Retail Ventures. In 1991 the Schottenstein family bought the rest of Retail Ventures and opened 153 American Eagle Outfitters. By late 2000 the company had introduced 46 new stores in Canada. American Eagle had approximately $2 million in annual sales in 2003 and now operates over 800 stores in the United States and Canada (
Strengths:
American Eagle Outfitters is a fairly new company but they are doing extremely well because they have a clear grasp of who their target market is. They posses a fresh new hip look with great quality clothing at a reasonable price for consumers (
Weaknesses:
American Eagle’s weaknesses is that they are a relatively new business in the industry and do not really have an established customer base yet. They need to work on earning the trust of their customers with their affordable prices and good quality of the garments sold. In addition to customer loyalty, not enough time is spent on advertising of the company. Because of the lack of advertising AE has experienced a loss of fashion sales in the recent years. The store needs to reach out to its target market by providing more commercial or doing more promotional work. American Eagle is challenged with determining what trends are appropriate for its customers and how to interpret thee trends. Over the past two years, competitors such as Abercrombie and Fitch have lowered their prices, which have created additional promotional pressure for American Eagle. Some investors believe Aeropostale has the value niche and Abercrombie has the high end positioning, so American Eagle is sometimes perceived as being stuck in the middle, without a true niche (
. Opportunities:
American Eagle still has a lot of room to expand throughout the united States, Canada, as well as the entire world. The Northeast is the most penetrated area with American Eagle Stores. Most states in the West and Midwest have less than 15 American Eagle stores. There is an opportunity to move into the young professional demographic. American Eagle could use its strong domestic base to go into the international market.
Threats:
A threat for American Eagle Outfitters is bankruptcy because they don’t have many loyal customers and a great amount of stores to compete with many of their competitors. There is also the threat of rival Abercrombie & Fitch coming to Canada to establish a customer base in an area that is mainly American Eagle territory. Another threat to the company comes from the changes in consumer demand and fashion trends. American Eagle cannot be certain that it will be able to continue to develop appealing styles or meet the changing consumer demands in the future. The retail industry is a very competitive market. American Eagle competes with other companies based on quality,