Approximately 150 American Eagle Outfitter stores will close over the next three years, after company earnings decreased 86 percent in the first fiscal quarter.
According to The Wall Street Journal, the company will begin the retailer's reorganization by shuttering 50 locations and 20 aerie-branded locations in 2014 as it cuts expenses and expands internationally. This will save the retailer 10 to 15 million dollars in tax savings.
American Eagle's temporary CEO said the report aligned with the retailer's predictions, publicized at the beginning of the fiscal quarter.
"Results were consistent with our expectations. The quarter reflected weak sales and increased markdowns," Jay Schottenstein said.
Schottenstein said the company is already working to reorganize and prepare for the future.
"We are committed to improved profitability and are working hard to implement our plan to strengthen our brands, channels and operations. Specific actions underway include continuing to build strong omni-channel capabilities, rationalizing our store fleet, reducing expenses, growing international licensed stores, and most importantly, delivering great merchandise and customer experience across our brands," Schottenstein said. "Our focus is on leveraging our strong brands and talented team in order to deliver long-term profitable growth and enhanced value for our shareholders."
On a brighter note, the company opened 11 new stores, including two new locations in Mexico, and one in China according to the press release.
American Eagle also arrived in Colombia, and 13 other countries for a total 77 licensed stores.
The retailer tallied $72 million in expenditures during the first fiscal quarter. The company expects to spend $230 million in 2014, according to the press release.
American Eagle isn't the only company scrambling to make ends meet - PetSmart's CEO told Bloomberg Businessweek that the animal goods retailer has also struggled recently. Big names like Target and Sears' shares have dropped as well.
"We did not achieve our sales goals, which were impacted by a challenging and volatile consumer environment and a competitive market," David Lenhardt said in a statement obtained by Bloomberg Businessweek.
