Dive Brief:

• American Eagle Outfitters on Wednesday unveiled a new concept store at Union Square in New York City, featuring "AE Studio," which will open ahead of the holidays on Nov. 10, according to a company press release.

• The focal point of the shop's first floor is a "Jeans Gallery," which in collaboration with Atelier & Repairs, designs custom denim repurposed from previous American Eagle collections. The store also holds dressing rooms outfitted with concierge iPads as well as a "collaboration space" for capsule collections created with emerging designers and artists.

• The store, which the teen retailer says is part of its 40th anniversary celebration, includes enticing amenities like free laundry facilities for students and a bar and lounge with a view of Union Square.

Dive Insight:

In a market beset by falling mall traffic and a notoriously difficult consumer demographic, American Eagle is benefiting from ongoing improvements to its assortments. Notably, denim got a boost in the back-to-school season. The company’s Aerie lingerie brand has consistently lifted the company's overall results in recent quarters, with second quarter same-store sales growing 26% (after a 24% rise in the year-ago period) compared to flat same-store sales at American Eagle (after a 1% rise a year ago).

In addition to its Aerie success, its effort to improve quality in denim have paid off, even spilling over to other sales, according to GlobalData Retail analyst Anthony Riva.

"Good cross-merchandising in store and a strong summer range helped to persuade many female shoppers to buy additional items along with their denim purchase,” he said in an email to Retail Dive about the retailer’s Q2 report. “Unfortunately for American Eagle, the success in womenswear did not replicate itself in men’s.”

Riva went so far as to say then that "Aerie continues to glitter," noting that the brand is taking market share from rivals, including the dominant player in the space, Victoria's Secret. "Its fresh take on lingerie – especially in the sense of using ordinary women as models and its body-positive advertising – is still striking a chord with consumers," Riva said. "New stores and effective marketing have also helped to drive sales.”

But the retailer nevertheless continues to struggle "to connect with consumers and generate growth,” according to Riva. That’s likely behind the new location in New York City. The new store is also making a big effort to connect with young shoppers on social media. In fact, the company's social media team will have an in-store work space where it can "keep their finger on the pulse of the brand."

The retailer will continue its emphasis on denim, according to American Eagle Global Brand President Chad Kessler. "As we celebrate the success of the last four decades, we look ahead to create new brand experiences to inspire today’s customer, and broaden our leadership in jeans," he said in a statement Wednesday. "AE Studio is a perfect example of our evolution where we invite customers to enjoy a unique brand experience, feel at home, and curate their distinct individual style."