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NEW YORK CITY-American Eagle Outfitters Inc., which has a history of consistent earnings and store expansion, has relied on a growth strategy that combines a keen fashion sense with solid business decisions about real estate, marketing, merchandising and “knowing the customer.” That was the gist of the company’s presentation on its growth strategy at the 13th Annual Goldman Sachs Global Retailing Conference Thursday.

Susan McGalla, EVP and chief merchandising officer for American Eagle, told the audience that specializing in the demographic of customers between the ages of 15 and 25 requires “the right interpretation of fashion at the right time.” Remaining successful with such a demographic requires “one foot on the gas pedal and one on the brake,” McGalla said.

The Warrendale, PA-based retailer operates 815 stores in 50 states, the District of Columbia and Puerto Rico, plus 71 stores in Canada. The company’s real estate expansion plans include both new stores and remodelings, among them seven new stores and 18 remodeled stores in the second quarter, with a full-year plan for 46 new store openings and 66 renovations this year.

Together with five of its new Martin + Osa stores targeting customers aged 25 to 40, the new openings and renovations are expected to increase the company’s square footage by 8% this year. The company recently signed 13 more leases for 2007 and expects to have a total of about 20 Martin + Osa stores opened by the end of 2007.

In August the company launched another concept, aerie by American Eagle, in stand-alone test stores, which range in size from 2,200 sf to 2,800 sf. The aerie format focuses on intimate apparel and dormwear designed to complement the other merchandise of the American Eagle brand.

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