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Investing.com -- American Eagle Outfitters Inc (NYSE:AEO) stock fell 3.9% after Modern Retail reported the company has hired external crisis communications specialists to manage backlash from its recent Sydney Sweeney advertising campaign.
The $3.3 billion apparel retailer is reportedly working with Actum, a global consulting firm specializing in crisis management, according to information obtained by Modern Retail. The move comes as American Eagle faces criticism over its "Sydney Sweeney Has Great Jeans" campaign, which plays on the homophones "jeans" and "genes."
Critics have condemned the campaign for allegedly evoking themes of eugenics and white supremacy, while others have noted it represents a departure from the brand’s previous body-positive marketing approach. The controversial advertisements have been prominently displayed on buses, a 20-story billboard in Times Square, the Sphere in Las Vegas, and social media platforms including Snapchat and Instagram.
When contacted about the controversy, a representative from Actum reportedly responded to media inquiries, confirming their involvement with the brand. However, American Eagle’s public relations agency of record later stated that this representative "was not authorized to speak on behalf of AE."
The negative market reaction suggests investors are concerned about potential damage to the brand’s reputation and possible impact on sales as the retailer navigates this public relations challenge.
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