Can American Eagle Win Back Teens With One-Size Crop Tops?

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"We certainly didn’t set out to say, ‘Oh, a bullseye on Brandy Melville’s back.’" This is how American Eagle global brand president Chad Kessler explains the strategy behind Don’t Ask Why, AE’s brand-within-a-brand. The line hits up many of the same selling points as wildly popular teen favorite Brandy: soft dressing, restricted sizing, a California aesthetic with Italian roots. Don’t Ask Why’s Soho summer pop-up and Brandy Melville’s NYC flagship are just two blocks away from each other on Broadway, both awash in bleached wood and flush with short shorts.

"Brandy’s definitely someone who broke into the American market with this kind of look," Kessler continues. "We’re looking around at everybody. You could say it has a Brandy vibe to it, but a lot of these styles are available at many retailers, not just one. Brands and trends come and go, and we are really trying to make this a reflection of how girls are dressing now."

Similar styles from Brandy Melville (left) and Don't Ask Why (right).

Unlike still-struggling peers Aéropostale and Abercombie & Fitch, American Eagle has begun to turn its fate around after last year's very public ousting of CEO Robert Hanson. As interim CEO Jay Schottenstein explained in the company's last earnings call for 2014, "Our initiatives led to a recovery in the second half of the year following the weak start." American Eagle saw net revenue increase by 3% in the year's final quarter.

Schottenstein attributed this to a "significant reduction of markdowns" as well as "improvement across the assortment, driven by innovation, quality, and better style." This revamped assortment can be attributed to the brand's successful lingerie line Aerie, as well as Don't Ask Why, which has become an incubator of sorts for AE.

Originally launched as the Made in Italy collection in August 2013, Don't Ask Why was rebranded last September. It's full of oversized sweaters, swingy dresses, and loose tanks. Some pieces, like a tie-dyed crop top, are near carbon copies of what you'll find at Brandy Melville, though AE sells theirs for nearly double the Brandy price.

"In the last couple years, we felt like there was a big shift toward easy, soft knit dressing," says Kessler. "We weren’t really leveraging that within the American Eagle brand. There's a partner in Italy who we’ve had a longstanding relationship with who makes fabric and also does garment production. In order to try to get into this soft knit dressing category as quickly as possible, we put a small team together to work with him in Italy and launch a new label to see what we could do in a smaller, more entrepreneurial way."

Don't Ask Why's New York summer pop-up shop.

A photo posted by DON'T ASK WHY (@dontaskwhyny) on May 16, 2015 at 11:51am PDT

Kessler adds that this desire for nimbleness led to Don't Ask Why's one-size offerings. "It's all about speed," he explains. "Doing it in one size allows us to see a style, fit it once, and go straight into production. It makes it faster for us to get ideas from festivals or from the street into the stores, rather than going through the more elaborate fit process we have at American Eagle."

Like many retailers, AE has hopped aboard the festival style train—Kessler says that members of his team took a scouting trip to Coachella last month—though their strategy around it is a bit different from that of ASOS or Forever 21.

"We use Don't Ask Why as a kind of testing lab for the American Eagle brand," says Kessler. "For example, the team came back from Coachella with new silhouettes we hadn’t incorporated into the American Eagle collection yet, and now we have those in the works with Don't Ask Why. We’ll bring those into Don't Ask Why stores in the next month or so, and if they work, we’ll roll them out for American Eagle."

"We’ve seen a lot of success," he continues, "not just with the Don't Ask Why label in the stores that it’s sold in, but also with taking learnings from Don't Ask Why and applying them throughout the rest of the chain. When customers respond to a certain item and sales are strong, we’ve been able to translate that to the much broader audience of the American Eagle brand."

Don't Ask Why is currently available in 50 American Eagle stores, as well as online. Like the brand itself, the New York pop-up—which is open May 21 through August 15—will serve as an experiment. If it does well, the company might consider opening permanent freestanding locations. In the mean time, they plan to use the shop to capitalize on summer tourist traffic and raise brand awareness.

Don't Ask Why targets AE's urban customers. Photo: American Eagle

"We see the Don't Ask Why girl as the cooler, city-based sister of the American Eagle girl," says Kessler. "Because we don’t use the American Eagle label, we’re able to try things that might seem a little more forward, a little edgier than we’re comfortable with at American Eagle. It tends to have more wash, more edge to all of it. Some of the graphics are a little more irreverent. The separate label gives us a freer hand."

Kessler means this literally—one of the main differences between Don't Ask Why and American Eagle is the lack of construction. The soft pants and roomy tops stand in direct opposition to AE's structured denim and preppy polos. Don't Ask Why also separates itself from American Eagle in other meaningful ways: its Instagram (with less than a thousand followers, it's miles away from Brandy's 2.5 million, despite the accounts' similar aesthetics) doesn't bear any mention of AE, and neither did the press invitation to the pop-up preview (even though there is select distressed denim from the parent brand at the shop).

Whether American Eagle will slowly begin to look more and more like Don't Ask Why remains to be seen. It largely depends on what the AE girl wants.

"When we look around for apparel and trends we want to be inspired by or cater to, we really look at our customer herself," says Kessler. "This is a need in her wardrobe we didn’t feel like we were fulfilling with American Eagle. There are a lot of people who are participating on all levels of this—it’s something we see throughout the marketplace—but for us, it's less about competition and more about responding to what our customers are wearing."