Mall retail chain sounds alarm on concerning customer behavior
The popular chain and label is taking a hit on some key numbers.
It's a pretty difficult time to be a retailer.
No matter who you are — or what you sell — most retailers these days would tell you that doing business has been tough over the last few years.
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Declining foot traffic at many brick-and-mortar stores, a rise in theft, higher prices, and now, tariffs, are making things confusing and complicated.
And it's even harder to be a retailer based out of the mall. Being located within a mall puts extra strain on a retailer's business model.
It used to be considered getting a golden ticket; running a business in a mall was a surefire way to get lots of foot traffic, which often converted into high sales.
But as the popularity of the American mall declines, foot traffic goes down with it.
Many malls are still charging their tenants outsized rents for dwindling access to customers, though. This leaves retailers with a conundrum; they either pull up stakes and break their leases to find business elsewhere, or go down with the ship.
Both are pricey — and particularly unsavory — propositions. 
Mall retailer have different strategies
Some traditional mall retailers are large enough to invest in a total rebrand.
For example, Macy's has been embarking on what it calls its Bold New Chapter, where it's featuring new labels, closing down underperforming stores, and ramping up online operations.
But this process is lengthy and expensive. Not every retailer has the luxury of time or resources to reinvent itself.
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American Eagle Outfitters (AEO) is located mostly inside indoor shopping malls; it has a large physical footprint with about 830 stores across the U.S.
The retailer was once hugely popular with teens, particularly Millennials who spent a vast period of time in malls during their younger years. Now, however, those teens have grown up, and demand simply isn't what it used to be.
Top retail chain store struggling
American Eagle, which targets young teens and women in particular, now has stiff competition from cheaper online stores like Shein and Temu.
But it's got a much more expensive brick-and-mortar operation to upkeep, and not as much brand power to keep its prices elevated.
So the mall outfitter is withdrawing its 2025 financial outlook amid what it's calling “macro uncertainty."
Related: After bankruptcy, mall anchor begins going-out-of-business sales
Revenue decreased 5%, or about $1 billion in the first quarter.
Part of this is due to a misguided approach to sales and inventory.
“We are clearly disappointed with our execution in the first quarter,” CEO Jay Schottenstein said. "Merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory.”
American Eagle will take a $75 million write down on its spring and summer clothing as it works to offload overstock inventory.
Analysts are anticipating American Eagle sees an operating loss of $68 million. The company reports Q1 earnings on May 29, 2025.
