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EX-99.b
EXHIBIT 99(b)
Exhibit 99(b)
Hello, this is George Kolber, Vice Chairman and Chief Operating Officer of
American Eagle Outfitters. On this call I will provide further information
about this morning's press release.
During this call, I may make certain forward-looking statements, based upon
current information, which represent the company's current expectations or
beliefs regarding the proposed transaction. The results actually realized may
differ materially from those expectations or beliefs based on risk factors
including those in our quarterly and annual reports filed with the SEC and the
risks that the transaction will not close or produce the expected results.
This morning we announced that we have entered into a letter of intent to
acquire 115 Thriftys stores, a number of which have been converted to Bluenotes
stores, a strategy which we will continue. The merchandise in all 115 stores is
sold under the exclusive private-label Bluenotes brand, a widely recognized
brand in Canada. The merchandise is targeted at young teens.
We believe Thriftys/Bluenotes is a natural fit where we can take advantage of a
number of synergies. First, we believe our design team can enhance the
merchandise assortment and selection offered in the Bluenotes operation. In
addition, through our sourcing infrastructure, we believe we can provide a
better product at a lower cost. Thus, over time we expect to increase Bluenotes'
sales and profit margins. With this acquisition we get a seasoned management
team, a solid infrastructure, an established brand and prime real estate.
We will also acquire 57 Braemar stores. Braemar is currently engaged in selling
women's ready-to-wear clothing. While the Braemar concept has struggled, we
have determined that the real estate is very appealing. We, therefore, plan to
convert some of the Braemar locations to Bluenotes and the remaining to American
Eagle Outfitters stores early in fiscal 2001.
This transaction also includes the acquisition of the NLS warehouse and
distribution operation. This operation currently services both Thriftys and
Braemar as well as other parties. Acquisition of this operation is important in
order to support existing operations and future growth in Canada.
We believe this transaction is an excellent opportunity for American Eagle
Outfitters. The acquisition of this Canadian operation, with an established
infrastructure will also enable us to continue to expand our business in the
United States.
Again, this transaction is subject to our signing and closing a definitive
agreement. We expect to close this transaction by late in the third quarter and
to fund the transaction through a combination of cash and new debt. It is our
expectation that there will be no material impact to fiscal 2000 earnings and
that it will be accretive beginning fiscal 2001.
