Struggling teen apparel retailer Aeropostale Inc has filed for Chapter 11 bankruptcy protection and planning to close more than 100 stores of its roughly 800 stores, succumbing to years of losses as shoppers thronged fast fashion retailers and competitors.
According to a report in Reuters: The mall-based retailer listed assets in the range of $100 million to $500 million, and liabilities of between $100 million and $500 million, according to a court filing.
Aeropostale said it plans to finance its operations during its bankruptcy through a $160 million loan from Crystal Financial LLC combined with operating cash flow.
The company has also announced an initial store closure list of 113 US locations, as well as all 41 stores in Canada.
The difficult market for teen apparel has triggered bankruptcy filings by high-profile retailers such as American Apparel Inc, Quiksilver Inc and Sports Authority Inc over the past year.
The company said in March it was exploring strategic alternatives, including a sale, citing a dispute with a vendor, MGF Sourcing US.
MGF is an affiliate of private-equity firm Sycamore Partners, which had thrown a lifeline of $150 million to the struggling apparel retailer in 2014 and previously owned an 8 percent stake.
Aeropostale expects to emerge out of bankruptcy within six months with a clear resolution of its ongoing disputes with Sycamore Partners, among other things, it said in a statement.
Aeropostale said in April that it would delay filing its annual report for the year ended January 30, 2016 as it explores strategic options.
Several US apparel retailers are also bearing the brunt of customers flocking to online retailers and fast-fashion retailers such as H&M, Forever 21 and Inditex’s Zara.
Although Aeropostale continues to struggle with falling sales, its rivals such as American Eagle Outfitters Inc and Abercrombie & Fitch Co have managed to turn around their businesses by controlling inventories and responding faster to changing fashion trends.
Established by RH Macy’s & Co in the early 1980s, Aeropostale made its stock market debut in 2002 but the New York Stock Exchange decided to delist the shares in April.
The company operated 739 Aeropostale stores in 50 states and Puerto Rico, 41 in Canada and 25 PS from Aeropostale stores in 12 states, as of May 1, 2016.
Aéropostale, Inc. opened its first store in 1987 in New York. It got its name from Compagnie Generale Aéropostale, a pioneer airmail company in 1920’s. As the name suggests, The early Aéropostale stores even captured the essence of this airmail voyage both in the original store design and in the aviation styled leather bomber jackets that they sold.
The Company currently operates more than 700 Aéropostale stores in the United States, Puerto Rico and Canada and 25 P.S. from Aéropostale stores in the United States. In addition, our authorized licensees currently operate more than 300 Aéropostale and P.S. from Aéropostale retail locations in the Middle East, Asia, India, Europe and Latin America.
The India Story
As India becomes important for global retailers, more and more apparel brands are introducing their international practices to launch and market their bands in the country.
Brought to India by Arvind Lifestyle, the brand is targeted towards people aged between 14-25 and that’s the very reason behind segregating the clothing sections as boys and girls instead of men and women. The biggest USP of the brand that is known for its trendy casual wear is the Seriously Stretchy Jeans, which the brand marketed through flash mobs in colleges in Delhi. These flash mobs saw the crew perform some really slick moves sporting the denim, keeping in terms with the name of the garment.
The New York-headquartered brand, popularly known as Aero, plans to open 30 stores and 25 shop-in shops over the next three years as well as an e-commerce portal.
The Mall Story
Aéropostale, Inc. is a mall based retailer, specialised in casual apparel and accessories. It targets young women and men through its Aéropostale® and Aéropostale Factory™ stores . For kids between 4-12 year old, they have P.S. from Aéropostale® stores.
Aéropostale provides customers with a focused selection of high-quality, active oriented, fashion and fashion basic merchandise at compelling values. It maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise. Aéropostale products can only be purchased in its Aéropostale stores and Aéropostale Factory. They also sell products online as www.Aéropostale.com.
Aéropostale currently has the following brands:
Junie & Jade
Live Love Dream
Map to Mars
The Bikini Lab