Following Susan McGalla’s planned departure next January as president and chief merchandising officer of American Eagle Outfitters Inc., CEO Jim O’Donnell will assume the role of president. In the meantime, the apparel retailer will search for a new chief merchandising officer.

McGalla, who joined American Eagle, No. 59 in the Internet Retailer Top 500 Guide, in 1994, has served as the retailer’s top merchandising executive for several years. Following her appointment in 1997 as general merchandise manager of women’s wear and later as executive vice president of merchandising, she was named chief merchandising officer in 2003 for the American Eagle brand, which targets teens and young adults.

Two years later, she also took on the title of president of the American Eagle brand. In 2007, after the retailer expanded to include the Martin + Osa sportswear brand targeting 25- to 40-year-old men and women, McGalla was promoted to president and chief merchandising officer of the entire company.

McGalla is credited by the company with building a strong market position for the American Eagle women’s business, launching the young women’s aerie brand, refining the Martin + Osa concept, and developing 77kids as a new children’s brand for kids in the 2-10 age range. Susan’s leadership and commitment to the development of our merchandising teams gives me confidence in a seamless transition, O’Donnell says.

In a statement released last week, the company said McGalla had decided not to renew her contract as president and chief merchandising officer. Her contract expires Jan. 31, 2009. After 14 years, very rewarding years with American Eagle, I feel it’s time to move on to new challenges, McGalla said in the statement, which did not indicate where she might go.

McGalla will devote her remaining time at the company to building up the Martin + Osa and 77kids brands. 77kids is expected to launch online this year at 77kids.com and begin opening physical stores in 2010.