American Eagle Outfitters SWOT and PESTLE Analysis

Strength

1. Strong portfolio of highly recognized and trusted brands: American Eagle Outfitters (AEO) operates on a very strong and robust portfolio of highly recognized and trusted brands, including the two of most popular brands nowadays, American Eagle and Aerie. Targeting people falling in the age group of 15 to 25 years old, the brand American Eagle is renowned for its broad assortment of clothing and accessories as well as a leading jeans collection. The second most renowned brand, Aerie derives its uniqueness from promoting body positivity and empowerment and can be considered as one of the fastest growing specialty retail brands. The brand offerings include intimates, soft apparel, sleepwear, swim and personal care products. In the fiscal year of 2019, these two brands contributed 3.5 billion and 800 million dollars to the overall revenue of that year. In 2019, Aerie continued record breaking momentum and became a market leader for intimates and feel-good apparel.

2. Wide customer reach through digital, omni and retail: Years and years of experience has enabled American Eagle Outfitters to broaden its customer reach with a particularly strong presence in the core North American markets. The company operates on a fleet of 1,095 company-owned stores and 217 licensed store locations spread across 24 countries. This healthy store fleet operations leverages the benefits of AEO’s highly compelling omni-channel platform. Moreover, AEO runs a strong digital business with the help of its leading omni-channel capabilities. This omni-channel platform enables the company to ship to over 80 countries globally along with aiding the firm to pilot same day deliveries in the US in 2019. Running a cross country platform was made possible by AEO with a few key global partnerships.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Long strides towards circular economy by promoting reduce and reuse: The rise in the middle-class segment of the society has given birth to the challenge of resource overconsumption, to deal with which requires long steps to be taken towards a circular economy. To prevent tons of apparels from ending up in landfills, American Eagle Outfitters aims to be a part of the movement towards a circular economy. It entered into a partnership with the Cotton Inc. program “Blue Jeans Go Green”, which collects jeans from the AE stores, and turns them into home insulation. Also, in order to reduce and eliminate the plastic usage in the supply chain, AEO has been able to save 4.3 million square meters of plastic every year since 2018, by using shopping bags made up of a higher percentage of recycled content. Moreover, the company has been using sustainably sourced labels for its brands, Aerie and American Eagle.

2. Reducing environmental footprint by reducing water, saving energy and improving materials: Another way of dealing with the overconsumption of the exhaustible resources involves reducing water utilization, saving energy and using more sustainable materials. Owing to its concerted efforts, American Eagle Outfitters has been able to reduce water usage by 30% in its jeans production process and increase the amount of recycled laundry water to 50%. Under the Water Leadership Program, it strives for proper water treatment to enhance water recycling and avoid environmental pollution. In terms of saving energy, the company has already reduced its carbon emissions by 32%, and aims for 40% and 60% by 2030 and 2040 respectively. The smart energy systems are also aiding by identifying anomalies and automating turning off the systems. Through better cotton initiatives and recycled polyester, AEO has been trying to adopt sustainable sourcing methods.