AE's jeans-smartphone promo deemed perfect fit

| Thursday, July 8, 2010

American Eagle Ouftitters Inc. is kicking off a free smartphone promotion with a test that begins today at six of the company's Western Pennsylvania stores.

The offer announced Wednesday invites customers to try on a pair of jeans and get a card with an Internet address to order one of more than 40 phones through carriers such as Verizon Wireless and AT&T.

Phones will be free if a new two-year service plan is purchased.

The South Side-based retailer's nationwide promotion runs July 21 through Aug. 3. But customers at AE stores at SouthSide Works, The Waterfront in Homestead, The Mall at Robinson, South Hills Village, Ross Park Mall and Cranberry Mall can get the cards starting today.

"It's one of the smartest strategic moves that any U.S. teen, tween or specialty-store retailer has ever initiated," retail analyst Burt P. Flickinger III said yesterday of the AE promotion.

With 30 million teens and adults unemployed or underemployed and with consumers more cash- and credit-conscious than at any other time in 70 years, school-shopping budgets are tight, said Flickinger. He is managing partner of Strategic Resource Group in New York City.

Teens who try on AE's fashionable, competitively priced jeans because of the phone promotion typically will leave a store with jeans and other merchandise, Flickinger noted, adding that instant-savings deals inspire brand loyalty.

AE stores have given away movie tickets and T-shirts in prior back-to-school promotions, said spokeswoman Jani Strand. And the phone offer arrives as other retailers begin aggressive deals.

Macy's said yesterday that new brands -- such as Madonna's Material Girl and an online teens' style lab -- will draw back-to-school shoppers to the department store chain, for example.

AE's offer includes BlackBerry and Android-based models. Customers will get cards explaining the phone promotion as they leave fitting rooms. They can order phones at Delivery will be via FedEx.

Those who take advantage of the offer also will get a $25 AE card to use in stores or online. Customers who order jeans online will get the phone cards with their shipments.

Verizon Wireless and AT&T representatives declined comment yesterday, saying the AE promotion is being handled through a third-party firm. And no iPhones are available.

"It wasn't part of the agreement that we were able to put together," Strand said.

Flickinger said for cell-phone carriers, the AE offer will serve to lock in young customers while Apple deals with quality-control issues surrounding its new iPhone 4.

"Many teens want to wait until the second semester for Apple to iron out its problems," he said.

American Eagle has three new jeans fits for men this fall, along with the new Jegging for women -- a jeans and leggings hybrid.

The company is working to strengthen its core brands this year, after comparable store sales fell 4 percent for 2010 and 10 percent the year before. The company's stock closed at $12.26 yesterday, up 45 cents.

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