There's been a rash of reports and declarations that the retail economy is finally on an upward trajectory. New stores are opening and people are shopping again! Case in point: Madison Avenue's spate of new shops and boutiques, not to mention all the feverish excitement that's churning up for Fashion's Night Out. But as Chanel is raising its handbag prices by 20 percent and H&M is lowering its dress prices to $4.95, it seems delusional to apply such a broad comment to the state of things. Clearly not everyone's profiting from boom times as American Eagle's latest earnings report showed losses of 66 percent.
According to the WSJ, the brand will close 50 to 100 of its 934 stores over the course of the next two to five years. In addition to shutting down its flailing Martin + Osa division—which was a large cause of the company's losses—other plans to return to profability will include brick and mortar locations for its 77kids division, which is currently online-only.
If the past two years have been any indication, the next two should be just as unpredictable. That said, American Eagle's profits may be soaring again before having to actually follow through with the closures.