American Eagle’s Urban Focus Boosts Intimates Appeal

At the end of last month, Victoria’s Secret proudly highlighted the concept of “less is more,” emphasizing its smaller format stores and streamlined inventory. American Eagle Outfitters (AEO) is now making a similar assertion, albeit for a straightforward reason: the growing resonance of its intimates line, Aerie, with consumers.

“The intimate’s business is roughly an $80 billion industry and Aerie still has only like 50% brand awareness. So, we’re still getting this brand out there and becoming famous for intimates. There’s a lot of runway here,” AEO Chief Creative Officer and Aerie Brand President  Jennifer Foyle said during an earnings call with analysts on Wednesday (Sept. 6).

During the call, American Eagle said Aerie is emphasizing innovation and broader matching choices. The firm reported successful results from the recent launch of SMOOTHEZ styles and an expanded bodysuit collection, supported by refreshed marketing efforts. With that, Aerie’s intimates segment has attracted new customers and boosted sales, ultimately enhancing brand awareness and product appeal. The brand has stated that its primary focus will be on distinctive marketing strategies to maintain a strong connection with consumers.

One of its latest marketing efforts is the “Hidden Gems” campaign, in which Aerie has looked to introduce a mature perspective in intimates. The focus is on providing quality designs while maintaining Aerie’s “playful spirit.” The campaign includes partnerships with Bumble, collaborations with influencers, participation in social media campaigns and hosting live events.

Foyle said that as a part of the “Hidden Gems” campaign, American Eagle ventured into the Meatpacking District of New York City, as the city is the brand’s third-biggest market, and invited customers to bring their bras for trying on Aerie bras, leading to a significant surge in momentum.

Stacey McCormick, chief marketing officer for Aerie, noted at the time of the event that New York City was “one with exceptionally strong foot traffic, so localization through a city-focused activation is a big part of our overall in-store success and building community.”

At the event location, a bra donation container was available in collaboration with charity partner Free the Girls, a nonprofit dedicated to aiding survivors of sex trafficking in their community reintegration. Additionally, a prize wheel allowed visitors to win merchandise, and a DJ booth showcased a unique Aerie “Read All About It” newspaper.

According to reports, more than 800 visitors participated in donating used bras and receiving personalized fittings from on-site bra specialists. Attendees also had the opportunity to explore booths featuring local companies, including Brooklyn Blooms, Inked by Dani, Kobrick Coffee Co., Mikey Likes It Ice Cream, Palace One Eleven, Popup Bagels, Schmackary’s, Sunday Forever, Sun Bum and Tom’s Perfect 10.

The Intimates Competition

American Eagle acknowledged it has more ground to cover in gaining a greater share of the intimates market. The acknowledgment stems from Victoria’s Secret’s efforts to reestablish relevance with consumers.

In July, PYMNTS reported that Victoria’s Secret had been seeking to showcase a “re-imagined fashion show” on Amazon’s Prime Video.

“The Victoria’s Secret World Tour” is slated to be accessible for streaming on Sept 26, with a tour-inspired collection available for purchase after the show’s release, as indicated in a press release from the apparel brand on Thursday, July 27.

Read more: Victoria’s Secret to Premiere ‘Re-Imagined Fashion Show’ on Prime Video

In June, PYMNTS also covered the news that Victoria’s Secret broadened its clothing offerings on Amazon after a successful initial launch.

See also: Victoria’s Secret’s Relevancy Bid Leads to Expanded Partnership With Amazon

American Eagle by the Numbers

In Q2 2023, American Eagle’s total net revenue reached $1.2 billion, with store revenue up by 4% and digital revenue down by 7%. Aerie’s revenue was $380 million, up 2%, while American Eagle’s revenue was $767 million, down 1%. Gross profit increased by 22% to $453 million, driven by cost-saving measures.