American Eagle Outfitters Takes Over 6 Chinese Stores

Company wants to run the stores in Greater China.

Rich Smith
Rich Smith
Feb 5, 2013 at 10:50AM
Consumer Goods

On Monday, American Eagle Outfitters (NYSE:AEO) announced that it has reached a mutual decision with Hong Kong-based investment holding company Dickson Concepts (International) Limited to terminate Dickson's license to sell American Eagle Outfitters products in China, Hong Kong, and surrounding markets. American Eagle Outfitters will be taking over the operation of six existing stores in China and Hong Kong.

American Eagle cited its own "long-term global expansion strategy and the importance" of the Chinese market as key factors in its decision to bring the stores back in-house. Globally, American Eagle uses a mix of company-owned stores, joint ventures, and licenses, but the company said in a statement that "a company-owned model is preferred for our brands" in Greater China, which has "sizable economic potential."

Dickson Concepts said American Eagle and Retail Royalty Company will pay it $10 million by the termination date, May 31.

American Eagle Outfitters recently announced a move into Mexico, with its first company-owned store there opening later this month. Globally, the company says it has a "presence" in 13 countries and ships products online to 77 countries.