American Eagle Outfitters, Inc. announced in a press release yesterday that the company plans to exit its children's business 77kids and the associated online business.
There are 22 77kids stores in the nation, including three in Massachusetts. The Commonwealth locations are in the , and the South Shore Plaza in Braintree.
American Eagle said the company is currently exploring options for the 77kids stores, including a full or partial disposition of the assets to a third party.
"Although making this decision is disappointing, it is in the best interest of the company and our shareholders to prioritize and focus our efforts on businesses with the highest return potential," Robert Hanson, chief executive officer of American Eagle Outfitters said in a statement. "We thank the 77kids team for their hard work, passion and dedication."
According to the release, in fiscal 2011, the brand generated an after-tax loss of approximately $24 million on sales of $40 million. The company anticipates charges associated with the disposition of 77kids to be taken primarily in the second and third quarters, which will be disclosed as plans are finalized.