December 11, 2013, 11:28 AM

American Eagle plans a new $80 million e-commerce distribution center

The center will open in June 2014 and double the retailer’s online fulfillment space

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American Eagle Outfitters Inc. has announced plans to spend $80 million on a new e-commerce distribution center that will open in June 2014. The Hazelton, PA, facility will more than double the apparel retailer’s 300,000 square feet of space devoted to fulfilling web orders at its distribution center about 280 miles west in Warrenton, PA, which the retailer plans to close.

American Eagle, No. 64 in the 2013 Internet Retailer Top 500 Guide, says it will continue to invest in its online channel, which grew at 17% in the third quarter, following 26% growth in 2012, as its other sales channels continue to struggle.

For the third quarter ended November 2, the retailer reported:

  • The company didn’t break out specific numbers, but says its direct business, including online sales, grew 17%.
  • Total net revenue decreased year over year 5.8% to $857 million from $910.4 million
  • Comparable-store sales decreased 5%.
  • Net income decreased 68.3% to $24.9 million from $78.6 million.

“Our Direct business grew 17% in the quarter, which followed a 26% increase last year. Investments in omnichannel initiatives are paying off,” says CEO and director Robert L. Hanson. “Growth was driven by higher conversion in our web business as we make improvements to our online shopping experience. Revenue from our newly launched mobile app more than doubled compared to last year.”

For the three quarters ended November 2, American Eagle reported:

  • Total net revenue decreased year over year 4.2% to $2.26 billion from $2.36 billion
  • Comparable-store sales decreased 6%.
  • Net income decreased 57.2% to $72.5 million from $169.3 million.
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