American Eagle Flies Into Israel

Pittsburgh-based fashion retailer American Eagle Outfitters Inc.’s (AEO - Analyst Report) latest international venture of store openings is in Israel. Yesterday, the company announced that it will open its first Israeli retail outlet at the Ramat Aviv Mall in Tel Aviv.

Following the first store opening on February 2, American Eagle plans to open 10 more stores at various locations in Israel within the next month. These stores are slated to come up at the popular malls in Tel Aviv, Hafia, Beer Sheva, Kiryat Ono, Ra’anna, Rishon Lezion and Netanya. As per the company, its stores in Israel or anywhere in the world will feature product assortment as available at its U.S. stores.

American Eagle has partnered with a leading Israeli retailer and wholesaler, Fox-Wizel Ltd., under a franchise arrangement, to operate the stores in the region.

American Eagle has been successfully executing on its plan to expand internationally over the past three years. Over these years, the company has opened about 21 franchise stores in 10 countries including Russia, China, Hong Kong and various cities throughout the Middle East. Further, the company’s first store in Japan is expected to go live shortly.

American Eagle has been a popular international brand due to the company’s e-commerce site, which ships across national borders since 2004. Currently, the company ships products to nearly 77 countries, with Italy being the latest addition.

American Eagle together with its subsidiaries engage in the design and marketing of casual clothing. The company has a strong portfolio of well-established brands, each of which is focused on the unique characteristics and rapidly changing preferences of its customers.

The company operates in a highly fragmented specialty retail sector and faces intense competition from other teenage-focused retailers, such as Abercrombie & Fitch Co. (ANF - Analyst Report) and Gap Inc. (GPS - Analyst Report).

We currently have a short-term Zacks #3 Rank (Hold) and a long-term Outperform recommendation on the stock.

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