Teen apparel retailer American Eagle Outfitters is going back to its roots after deciding to ditch its struggling men's and women's concept Martin+Osa.

It's probably fair to say the move has been a long time coming after the casual sportswear chain, which targeted 28 to 40 year-old adults, struggled to make a mark since its launch in 2006.

The closure affects all 28 Martin+Osa stores and its online business, and comes after it generated a net loss of US$44m in fiscal 2009, including a non-cash impairment charge of $11m.

"Martin+Osa, it had its moments," American Eagle chief executive Jim O'Donnell told analysts on a conference call yesterday. "Unfortunately, there were very few positive moments. And it was ever-changing."

He also admitted the neither shoppers - or, in fact, the company itself - seemed to understand "what was the compelling attractive component that was supposed to be Martin+Osa."

Rolled out with great fanfare in 2006, the chain was seen as a long-term growth opportunity, and one that would give the teen clothing specialist access to the sportswear market for an entirely new generation of shoppers.

The reality, however, was that moving outside the 15-to 25-year old target customers of its American Eagle clothing and Aerie intimates brands also took the retailer outside its comfort zone.

The chain's focus on higher priced casual wear such as denim and cashmere pitched it against more successful competitors like J Crew and Banana Republic, and a failure to connect with its customers saw growth stagnate as they chose to spend their money elsewhere.

And of course the recession had a part to play in its demise as well.

Unlike their younger counterparts who still have a considerable disposable income to spend on discretionary items like fashion, older shoppers have been weighed down by recessionary worries - with the collapse of the credit, housing and job markets all curbing their clothing spend.

It's a situation that's also all too familiar to Abercrombie & Fitch, which last June decided to pull the plug on its Ruehl chain, which catered to post-college adults.

For American Eagle the potential to create long-term shareholder value now rests with its remaining brands, including AE, Aerie and 77kids.

But with more than 939 stores in its AE chain, the most likely focus in the future will be on Aerie, with just 137 standalone shops, and the 77kids range which targets children aged two to ten and is only available online.

"If you look at the Aerie brand, you'll see tremendous consistency," O'Donnell told analysts. "We have a very strong assortment in women's undies. And we'll continue to be strong."

"77kids," he added, "have a very creative team, both in design and in merchandising. 77kids have not only met their hurdles, but have exceeded their hurdles that we've laid out for them while we had the business online."

The lesson, it seems, is to stick to what you know.