Getting American Eagle into the Private Label Business
Updated: Nov 15, 2018
Today is the 26th anniversary of American Eagle Outfitters. Jay Schottenstein, my brother Paul, and I were on the phone. Jay was excited about the anniversary and wanted to reminisce. It is an emotional day for the three of us as we celebrate the growth and success of the company.
American Eagle Outfitters (AEO) was acquired by Jay and Jerome Schottenstein and was focusing primarily on casual and sportswear clothing for the 15-25 year old market. As the brand grew and opened more stores, its needs changed.
Initially, AEO operated like a traditional retailer, purchasing goods from brands and reselling in its stores. The only jeans they offered in their stores were Levi’s.
Towards the end of 1991, Paul approached Jerome and Jay Schottenstein about doing private label jeans and building their own brand. They liked the idea and were willing to test it, so they issued an initial order of 24,000 units and instructed their people to get behind the project.
Everyone was excited, somehow feeling that this could become something big. This was 4 years before NAFTA was in effect, and making jeans as a full package in Mexico was not easy. But we ended up with what would be the first 100% Mexican jean ever exported to the U.S.
We delivered the first order in March 1992, and anxiously waited to see what would happen. The jeans were high quality, fit and sold well, and within a couple of weeks, Paul called extatic, the reorder came in for 630,000 pairs.
We delivered the 630,000 pairs and for many more years, we made millions of them. In the process we helped AEO build their private label business, which has helped them become one of the most recognizable brands in the world.
Paul was constantly feeding ideas and the latest products, contributing to keep AEO on top, while the teams were being created.
With our successful partnership and long-term growth in mind, Jay very graciously offered and arranged for us to acquire 10% of the company.
Today, AEO is one of the best-managed retailers in the world and the second only to Levi's. The friendship endures to this day, everyone shares the feeling that we were there when it happened and somehow had a hand in it.