American Eagle Launching Children's Concept 77kids

There's a new kid at American Eagle Outfitters Inc.

DANA POINT, Calif. — There's a new kid at American Eagle Outfitters Inc.

Targeting a growing market, chief executive officer Jim O'Donnell said Thursday the company is launching a children's apparel retail concept called 77kids by american eagle aimed at youngsters between the ages of two and 10. American Eagle plans to make the first sale at by early fall with a roll out of the inaugural store next year. The line will expand into infants' clothing 18 months after the launch.

"It fits into the American Eagle brand," O'Donnell said at a financial conference sponsored by ICR at the St. Regis Monarch Beach Resort & Spa here. "American Eagle has this connection with the young consumer. It's known by moms who shopped [at American Eagle] when they were younger."

American Eagle is venturing into the kids' market as other brands, including Marc Jacobs, J. Crew and Lucky Brand Jeans place more attention on the booming sector. Marshal Cohen, chief industry analyst for market research firm NPD Group in Port Washington, N.Y., said sales of children's clothing rose 7 percent in 2007, outpacing the 2.6 percent growth for men's and 1.9 percent increase for women's.

That's not to say children's wear is easy. Talbots Inc. this month said it will discontinue kids' and men's businesses by the fall to help focus on its core misses', special sizes, Collection, accessories, shoes and J. Jill operations.

O'Donnell said 77kids will cater to a broader market than higher-end labels such as Marc Jacobs and J. Crew by being a moderate-priced "value player" with attention to style and fit.

There were few details about 77kids' pricing, locations of new stores and sales goals, but O'Donnell said the styles will encompass denim, fleece and knitwear. "It'll capture the heritage of the [American Eagle] brand," he said. "It's not only cute and trend-right, but it also has all the facets that a mom wants: durability [and] versatility."

American Eagle, which is based in Pittsburgh and generates more than $2 billion in annual sales, mulled the idea four years. The company put the concept on the back burner to introduce Martin + Osa, its label geared toward 28- to 40-year-olds, in September 2006.
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