This should come as a relief to American Eagle investors, as Martin + Osa has been a drain on American Eagle's business since its inception. In 2009 it recorded a loss of about $44 million.
American Eagle will now focus on its namesake concept, aerie, and children's brand 77kids.
All 28 Martin + Osa stores will close, as well as its online business -- moves that should be completed by the end of the year.-- Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.