"You don't renegotiate. Once you have a binding agreement you have to stick to that agreement," said James O'Donnell, chief executive officer. "[But] the deals we have been negotiating on for 2009 on our renewal and remodeled stores are very, very competitive."
In 2009, the company is planning approximately 11 new and 25 to 35 remodeled American Eagle stores and 17 new aerie stores, down from 35 American Eagle, 77 aerie and 10 Martin + Osa stores. American Eagle, however, is likely tapped out.
"There are very few new store opportunities in North America for American Eagle," O'Donnell said. "Any new stores would probably be offset by store closings in certain markets."
Aerie, however, could grow to up to 500 units. Martin + Osa, which has continued to lose money is undergoing evaluation through the third quarter, O'Donnell said.
"Martin + OSA has a very definitive, very realistic goal for loss reduction in 2009," he said. "If dramatic improvement doesn't take place at that time, then I'll have to make a decision."
"We're protecting our profitability while thoughtfully investing in our future are the basic principles behind our 2009 plans," said Joan Hilson, chief financial officer. "Our plans for 2009 reflect a conservative posture."
Total sales for the quarter were $905.7 million, a decrease of 9% compared with the fourth quarter of the previous year. Fourth-quarter comparable store sales decreased 16%. Net income was $32.7 million, compared to $140.5 million the prior year.
For the year, total sales were $2.989 billion, down 2% from the previous year. Comparable store sales decreased 10%. Net income was $179.1 million, compared to $400.0 million the previous year.
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