American Eagle Outfitters to exit 77kids brand
Pittsburgh — American Eagle Outfitters is getting out of the children's business, announcing Friday that it is exploring a full or partial sale of 77kids, which includes 22 stores and the online business.
Robert Hanson, CEO of American Eagle Outfitters stated, “Although making this decision is disappointing, it is in the best interest of the company and our shareholders to prioritize and focus our efforts on businesses with the highest return potential. We thank the 77kids team for their hard work, passion and dedication.”
In fiscal 2011, the brand generated an after-tax loss of approximately $24 million on sales of $40 million. The company anticipates charges associated with the disposition of 77kids to be taken primarily in the second and third quarters, which will be disclosed as plans are finalized.
In other news, American Eagle said its CFO Joan Hilson is stepping down and will leave the chain in July. The company's VP/controller Scott Hurd will serve in an interim capacity while a replacement is found.