In 2014, American Eagle Outfitters opened three stores in the United Kingdom. Just three years later, the teen retailer abandoned the market.
The U.K. fashion market is notoriously tough for international retailers to break into. It’s crowded, and U.S. retailers’ products are often too expensive. Due to the country’s small physical size and high population density, fast shipping is expected.
Retail experts say American Eagle didn’t differentiate itself from the competition when it entered the British market.
“You can’t just set up shop in another country as if it’s your own and do exactly the same thing you would back at home,” said Chana Baram, a senior retail analyst at Mintel. “You have to get to know a new customer, even between an American customer and a U.K. customer.”
American Eagle doesn’t break out international stores in its financial results, so it’s not totally clear how the U.K. stores performed. In a March call with analysts, American Eagle’s CFO said it had reduced its “loss-making businesses” in Europe.
American Eagle is trying to take on the British fashion market once again. In February 2019, the retailer announced it would expand into Europe through a partnership.
In a press release, American Eagle said stores were “expected to open in Ireland this summer.” As of January 2020, no stores have opened in the European countries targeted for expansion, according to the company’s online store locator.
American Eagle did not respond to CNBC’s requests for comment.
Can American Eagle crack the competitive U.K. fashion market? Watch the video above to learn why the retailer ran into problems in 2017.