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February 26, 2019

American Eagle Outfitters rolls out subscription service

By Hannah Abdulla

US apparel retailer American Eagle Outfitters (AEO) has launched AE Style drop, a rental subscription service for clothing.

According to the group’s Facebook page, US customers can rent three items at a time and exchange them as many times as they like for a subscription fee of US$49.95. As an incentive to buy items, customers are offered a 25% or higher discount for the items they keep.

The move sees the retailer respond to a growing need for new business models, particularly in line with the belief that today’s consumer is looking to live more sustainably and is more concerned with owning less. 

Several businesses have moved to a subscription model in recent years including Under Armour and Old Navy, which launched a kids’ subscription service in 2017. Rent the Runway, a subscription service that launched in 2009, provides designer dress and accessory rentals at a monthly fee of US$99.

The launch has received mixed reviews on its social media pages.  

In an interview with just-style recently, the head of circular fashion at the C&A Foundation, Douwe Jan Joustra, explained how retailers need to adopt new business models, transitioning into “service providers” where fashion will be offered as a service for customers, not consumers.

“Basically, we are focusing on how we can get clothing as a service instead of clothing as a consumer product with a lot of sales. When you make it into a service, it means that you need service providers instead of retailers and that’s the big change and challenge that we foresee,” Joustra told just-style.

Separately, AEO has announced plans to expand its American Eagle and Aerie brands throughout Europe with a multi-year license agreement with AEO EU.

The first American Eagle stores are expected to open in Ireland this summer. Following the opening of these locations, an e-commerce site serving the European Union will lay the foundation for a three-year brick and mortar expansion strategy across Germany, Switzerland, Austria, the Czech Republic, th, UK and the Netherlands.

“Global expansion is a major growth opportunity for AEO Inc and we are excited to take our leading American Eagle and Aerie brands to vibrant consumer markets across Europe,” said Jay Schottenstein, CEO of American Eagle Outfitters. “The AEO EU team brings deep market expertise and strong connections enabling us to create the best possible brand experience for local consumers.”

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