Fox Group Exits European Joint Venture with American Eagle

The Fox Group is selling its 49% stake in AEO Europe Retail, a joint venture with American Eagle Outfitters, for $2 million. The deal, an agreement in principle, will see American Eagle acquire full ownership of the European operation. Fox stated the exit is due to the joint venture's lack of contribution to its overall results, citing its failure to meet initial expansion goals and persistent losses.

The venture, established in 2022 with American Eagle holding 51% and Fox 49%, aimed to expand American Eagle's brands, including Aerie and Offline, across Europe, starting with the Netherlands. The original plan included launching nine stores in the Netherlands and gradually expanding to other countries. However, the expansion stalled, with the joint venture operating only six stores in the Netherlands by the end of 2024, and one closing in 2025, leaving a total of five stores and an online presence.

Fox invested approximately 33.4 million shekels (about $9 million) in the joint venture since its inception. This included significant capital injections in 2022, 2023, 2024, and the first half of 2025. Despite these investments, the venture incurred substantial losses, with Fox's share of these losses amounting to approximately 23.5 million shekels between 2023 and 2025. The company's financial reports had already accounted for these losses, reducing the book value of its investment.

Fox's sale of its stake for $2 million is not expected to significantly impact its financial statements, as the economic impact of the venture's underperformance has largely been recognized through accumulated losses and the diminished investment value over the years. The company's international fashion and home operations, which include other brands in Canada and Europe, generated revenues of approximately 149.3 million shekels in 2025 but reported an operating loss of about 29.9 million shekels.

This exit follows a similar pattern for Fox Group, which previously sold its stake in a European Foot Locker venture due to poor results. The company emphasizes that this is not a withdrawal from all international activities but rather an exit from a specific, unsuccessful venture. The deal is expected to be finalized in the fourth quarter of the year, subject to definitive agreements and closing conditions.