The American Eagle Israel chain, owned by Fox-Wizel Ltd. (TASE: FOX), is preparing to lower its prices. Sources inform "Globes" that the chain is planning to cut its clothing and accessories prices by up to 30%. The lower prices will apply starting will the upcoming summer collection expected to enter the stores in January.
The chain hopes to thereby improve the price image of its brand name, believing that the measure will enlarge the chain's customer audience and lead to organic sales growth to its existing customers.
The Israeli chain began its new policy three months ago as a pilot in the jeans segment. Prices of jeans were lowered from NIS 270-300 to NIS 199-229 a pair - a price cut of 24-26%. Since the jeans campaign began, the chain's sales of jeans have risen substantially, and it was therefore decided to extend the price cuts to all of its products.
Fox-Wizel VP development Asi Wizel, who will soon become CEO of the Fox Israel chain, said that the current measure would improve the company's price image, without affecting its gross profit. "American Eagle will already cut prices for the summer collection. The consumer's initial impression and first motivation is fixed when the customer picks up an item and looks at the price tag on it. When you start at this point, it's harder to tell the customer later about bargains. In the end, the gross profit will stay the same, but the initial price will be fairer and more suitable."
Published by Globes [online], Israel business news - www.globes-online.com - on November 27, 2014
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