American Eagle Outfitters Selects ProfitLogic to Strategically Assess 765 U.S.-Based Stores
ProfitLogic’s Analytic InSights for Store Clustering Enables Pricing That Maximize Returns Inventory investments
Boston – November 30, 2004 – ProfitLogic, the industry-leading provider of Merchandise Optimization solutions, today announced that American Eagle Outfitters (NASDAQ: AEOS), a leading lifestyle retailer, successfully employed ProfitLogic’s Store Clustering Optimization application, one of a spectrum of Analytic InSights, to inform its merchandising processes with a detailed analysis of customer demand. ProfitLogic helped American Eagle strategically group 765 stores into appropriate clusters to better tailor pricing to local market needs.
American Eagle’s executive team believes that one price does not fit all. And, therefore, identified both the need for region-level pricing and a strategic method for grouping its stores to execute pricing more effectively.
“American Eagle Outfitters is committed to investing in merchandising processes that maximize returns on our inventory investments,” said Jim Ford, Vice President of Planning and Allocation at American Eagle Outfitters. “We have now successfully transitioned from chain to region-level pricing, which, we believe, will lead to fewer markdowns and ultimately higher sales and gross margins.”
Store Clustering Optimization
Traditionally retailers have used store attributes (such as store volume and location) and third-party demographic data (such as ethnic background and disposable income) to cluster stores. However, this information doesn’t truly help identify which stores perform the same way. Store Clustering Optimization is a next-generation approach that combines a retailer’s own store sales data and the key merchandising decisions that a retailer wants to improve as a basis for clustering.
A retailer must first identify what the store clusters will be used for: to create better buying quantity and flow, to improve price/promotion strategy, or to help better focus the assortment strategy. This determines the best combination of factors that should be considered for store clustering, for example, stock out-adjusted sales, square footage, seasonality and sales price elasticity. ProfitLogic’s Store Clustering Optimization Analytic InSight helps retailers identify the following:
1) What purpose will store clusters serve?
2) What is the best way to group stores?
3) How many store clusters (groups/zones) are needed for the chain?
4) Which stores belong in each cluster?
About ProfitLogic`s Analytic InSights
Analytic InSights are a collection of hosted product offerings that assist retailers on two fronts. First, they help retail executives make more informed strategic merchandising decisions based on a detailed understanding of customer demand. For example, Inventory Portfolio Optimization provides guidance for determining how much to invest in each merchandising category. Second, Analytic InSights empower planners and allocators to more effectively execute merchandising objectives by providing strategic analysis, assessment and guidance. For example, Store Clustering Optimization ensures that stores are grouped appropriately for assortment, allocation, pricing and promotion decisions. (For more information about Analytic InSights, click here: ProfitLogic Expands Merchandise Optimization Solution Suite with Insights that Turbo-Charge the Merchandising Process)
To read more about the significant enhancements that ProfitLogic has made to its Optimization Suite, click here: ProfitLogic Advances Merchandise Optimization Suite to Meet the Need for Better Decision Support throughout the Merchandising Process.
About American Eagle Outfitters
American Eagle Outfitters (NASDAQ: AEOS) is a leading lifestyle retailer that designs, markets, and sells its own brand of relaxed, casual clothing for 15-25-year-olds, providing high-quality merchandise at affordable prices. AE`s collection includes modern basics like jeans, cargo pants, and graphic T`s as well as a stylish assortment of cool accessories, outerwear and footwear. AE`s Canadian subsidiary, Bluenotes/Thriftys, offers a more urban/suburban, denim-driven collection for 12 to 22 year-olds. American Eagle Outfitters currently operates 765 AE stores in 49 states, the District of Columbia and Puerto Rico, 68 AE stores in Canada, and 107 Bluenotes/Thriftys stores in Canada. AE also operates via its Web business, ae.com, which offers additional sizes and styles of favorite AE merchandise.
About ProfitLogic
ProfitLogic provides an industry-leading suite of Merchandise Optimization solutions designed for retailers whose priority is getting the highest return on inventory investments. ProfitLogic’s solutions provide merchants with day-to-day operational decision support and workflow for making better-informed assortment execution, allocation and fashion replenishment, promotion, pricing and markdown decisions. ProfitLogic has delivered fast, flexible solutions with significant financial benefit to industry leading retailers such as American Eagle Outfitters, AnnTaylor, Bloomingdale`s, Charming Shoppes, Gap Inc., including: Banana Republic, Gap, Old Navy, Gap International and Gap Outlet; JCPenney, Lerner New York, Marshall Field`s, Meijer Stores, Northern Group Retail, Sears, ShopKo Stores, Target Stores and Toys R Us. For more information about Cambridge, Mass.-based ProfitLogic, call 617-218-1900 or visit www.profitlogic.com.
Contact:
Jakki Glivicky
ProfitLogic
617-374-5959
jglivicky@profitlogic.com
Back...
