American Eagle Outfitters is selling its Bluenotes retail apparel division to a private company controlled by Michael Gold, who owns Canadian retailer YM Inc.

The agreement, which is due to close on 5 December 2004, is subject to customary conditions and regulatory approvals.

American Eagle Outfitters will record a fourth-quarter loss from discontinued operations of approximately $0.08-$0.11 per diluted share, related to Bluenotes.

Jim O'Donnell, chief executive officer of American Eagle Outfitters said: "We greatly appreciate the hard work and dedication of the Bluenotes team.

"Michael Gold has extensive retail experience in Canada, which we are confident will lead to future success."

O'Donnell added that the sale would allow the company to focus on expanding the American Eagle brand worldwide, and on the development of its next US retail concept.

American Eagle Outfitters sells casual clothing for 15 to 25 year-olds. Its Canadian subsidiary Bluenotes/Thriftys offers a more denim-driven collection for 12 to 22 year-olds.