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Why It Makes Sense For American Eagle To Expand Into Latin America

American Eagle Outfitters (NYSE:AEO) has unveiled plans to expand operations into the South American nations of Chile and Peru partnering up with Eurofashion Limitada, a leading Chilean company which specializes in building international fashion brands. Eurofashion Limitada is on course to open the first American Eagle store in Chile later this year while a store opening in Peru will most likely happen by the start of 2016. The move is poised to be a major game changer for the company in the region as a number of South American countries have been showing signs of tremendous progress. But there's more to the picture than meets the eye.

The leading factor which drew a company like American Eagle to Peru and Chile was the progress these countries were making. Take Chile for instance; unemployment had been on a steady decline for the past half decade, standing at 6% in 2013 and as a result, growth rate stood at a healthy 6% for the period spanning from 2010-2012. Read more