American Eagle Outfitters is launching an agency review and seeking its first global agency of record.
It's a big step for Pittsburgh-based company, which has been around since 1977 and has historically worked with agencies on a project basis. With its new approach to partnering with agencies, American Eagle wants a single global shop to handle creative, media and digital work with a focus on six major global markets: the U.S., Japan, Russia, China, Israel and the United Arab Emirates.
The changes come as American Eagle has hired longtime Levi's exec Robert Hanson to serve as its new CEO. Mr. Hanson, 48, succeeds retiring CEO Jim O' Donnell, and brings to his new role more than 20 years of experience working on the Levi's brand. Most recently he served as global president leading a $3.5 billion business across retail, eCommerce and wholesale channels in the Americas, Europe and Asia.
American Eagle's push for a more unified global marketing approach also coincides with an aggressive international expansion by the retailer. Late last month, the company announced the opening of stores in three new international markets, Morocco, Jordan and Egypt. At the time, Simon Nankervis, VP-global business development, said: "We are continuously delighted by consumers' excitement and passion for the American Eagle Outfitters brand as we pursue our international expansion strategy around the globe. We look forward to announcing new stores and additional countries in the coming months."
That unified approach will be necessary to go up against trendy retailers like H&M, Topshop and Uniqlo, which have quickly expanded from the U.K. and Japan into the U.S. and have won market share among young adults. American Eagle has more than 1,000 stores, and its sub-brands include 77kids and Aerie, which offers dormwear and intimates.
The review process is being handled by American Eagle's marketing team, with the help of New York-based search consultants Ark Advisors. The consultancy declined to comment for this story, while American Eagle couldn't immediately be reached. But according to industry executives, a number of global agencies at a range of holding companies have been targeted to participate in the first stage of the review, which is a request-for-proposal process.
The company's measured media spending in the U.S. for 2010 and 2011 came in under $10 million, according to Kantar. But that number is set to swell. In its third-quarter earnings report, it noted that selling, general and administrative expenses increased 3% to $191 million due to higher sales, new store openings and a planned investment in advertising.