The company plans to reorganize around its remaining stores, but the specific details of its restructuring plan remain unclear, the Journal added. “The past few years have seen the once popular teen retailer lose sales and share as it has fallen out of favour with its customer base”.
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The company is now looking for buyers to pull them from the trenches of irrelevance, as cheaper, trendier stores a la H&M and Forever 21 continue to kill off these retail dinosaurs. Its bankruptcy follows the recent Chapter 11 filings of competitors such as Pacific Sun, American Apparel and Wet Seal.
In March, the retailer announced plans to evaluate strategic alternatives, including a sale of the company. Aeropostale is asking the court for permission to investigate Sycamore and Kaluzny, along with others. Last year Geiger complained that MGF’s prices were too high, resulting in Aeropostale paying $25 million more than it would for comparable merchandise from competing suppliers. At one time, Sycamore also owned eight percent of the teen apparel retailer. “In itself does not provide a long-term solution”, Saunders added.
Aeropostale, a brand established by R.H.
The department store Macy’s was the first to launch the brand in the early 1980s and its first standalone store came about in 1987. The mall recently announced Massey’s Pizza will occupy the former Garfield’s restaurant location, also next to entrance C.
According to company officials, the company expects to re-emerge from bankruptcy, within six months.
Bankruptcy can make shuttering stores easier because of rules that allow companies to cancel contracts, including leases.
U.S. Bankruptcy Judge Sean Lane in Manhattan Wednesday approved the company’s request to draw from a $160 million debtor-in-possession financing package provided by Crystal Financial LLC. The company blamed MGF for breaching the basic supply agreement and causing disruption, while MGF said that it did not breach the agreement terms.
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Aeropostale said in April that it would delay filing its annual report for the year ended January 30, 2016 as it explores strategic options.
