Is American Eagle Outfitters abandoning the fast fashion model?

At some point during mid-June, American Eagle Outfitters opened a new store in East Hampton, New York. The opening went relatively unnoticed as most media outlets focused on covering other brand's reactions to social justice movements and the pandemic. However, the new American Eagle Outfitter store still opened whether people knew about it or not. Called Unsubscribed, the store focuses on "consciously-made, slow fashion" carrying products from its private label as well as third-party brands including Veja, Boyish, and Indego Africa. There is little information currently known about Unsubscribed, but according to American Eagle Outfitters, the store's private label will release just two collections per year. WWD also says there will be a website in the future that will feature "on-brand content" instead of selling products via e-commerce. Business Insider reported that there are no plans to open additional stores after the East Hampton location.

This is all a stark difference from the way that other American Eagle Outfitters brands — including American Eagle, Aerie, and Todd Snyder — operate. The best-known brand, American Eagle, has been around since 1977 and sells out of more than 1,000 stores in the U.S., Canada, Mexico, and Hong Kong. In addition, American Eagle and Aerie have well-established e-commerce businesses that continue to grow. In June, American Eagle Outfitters reported a 33% increase in online sales year over year. Those online sales are not enough to make up for lost in-person sales, though. At the end of its fiscal first quarter on May 2nd, American Eagle Outfitters reported that profits were down 91.3% to just $28.3 million. Meanwhile, brands that have a similar audience to American Eagle Outfitters, such as J.Crew and Gap, are both publicly struggling, with the parent company of the former recently filing for bankruptcy. Jay Schottenstein, the CEO of American Eagle Outfitters, acknowledged the difficulties facing retailers and said, "This event [COVID-19] has clearly accelerated the disruption that has been underway in the retail industry. Bankruptcies and some store closures will continue, which we see as an opportunity to gain share. We will use this event as an inflection point and chart a new and more profitable course for the company." This message lines up with the drastic change in direction by American Eagle Outfitters, leading to the opening of Unsubscribed.

Change is exactly what fast fashion retailers, in general, need. The pandemic and the economic downturn have forced everyone in the fashion industry to reanalyze their brand operations and business models. Fast fashion is being hard hit in a unique way by the string of announcements from luxury fashion brands that they will be releasing fewer collections and hosting fewer presentations per year. Designers like Dries Van Noten have called for "adjusting the seasonality and flow" of future collections. The idea, which has been supported by numerous other designers, is that Spring/Summer clothes will be presented to the public in the spring and available for sale soon after. Previously Spring/Summer collections were shown on the runway in the fall, giving fast fashion retailers plenty of time to knock of trends and sell them for cheap. Analysts like Thomie Serdari believe that without the ability to copy luxury fashion designs easily, fast fashion will have to "work a little harder" to stay relevant. Luckily, staying relevant is something that Unsubscribed doesn't have to worry about.

As the fast fashion model faces shrinking profits and an originality deficit, Unsubscribed is choosing to make shopping an experience rather than just a store. Using the website for education or community, and promoting direct-to-consumer brands that typically don't have physical locations, Unsubscribed is being presented as an alternative for consumers who are sick of having sales and trends shoved in their faces.

It's not surprising that American Eagle Outfitters would want to abandon the fast fashion model. Young consumers have waged war against the sped up business model, and brands are starting to feel the pain of not meeting shoppers' demands. American Eagle Outfitters has to know that if they continue producing cheap clothes that are only meant to last for a season, then they will lose a good portion of Millennial and Gen Z consumers. American Eagle Outfitters may not completely abandon the fast fashion model that Aerie and American Eagle follow; still, by launching Unsubscribed, they are acknowledging a future where the slow fashion model is more desirable.