Teen retailer Aeropostale filed for bankruptcy Wednesday and said it will close 113 stores in the US and all of its 41 shops in Canada as part of a restructuring move for the struggling 805-store chain. Going-out-of-business sales at the USA stores will begin this weekend.
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According to documents the company filed with the United States Bankruptcy Court for the Southern District of New York, Aeropostale will shutter its stores in Fond du Lac’s Forest Mall and the Wausau Center in Wausau, the Milwaukee Business Journal reports. The news didn’t come as much of a surprise on Wall Street: Sales have been in a long-term slide at the troubled retailer, and the company had said back in March that it was “exploring strategic alternatives”, including finding a buyer.
Last month, the group saw its fourth-quarter net loss widen to US$21.7m from $13.5m in the same period a year ago, while sales declined 16.1% to $498m. The company did not provide any details on how deep the discounts will be, or when the Canadian stores will ultimately close.
The fashion retailer is exiting certain markets altogether, including Alaska and Hawaii, according to a court filing. Aeropostale was recently delisted from the New York Stock Exchange after trading for less than a dollar for several days.
The retailer, which is geared toward clothing for teens, filed for Chapter 11 bankruptcy protection on Wednesday.
As expected, Aeropostale Wednesday filed for Chapter 11 bankruptcy protection.
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The Missoula location is the only Montana store that’s slated to close. “Fast fashion” outfits like H&M and Forever 21, with more cheap clothes, have emerged in recent years to take a growing market share from Aeropostale, Abercrombie & Fitch and American Eagle Outfitters, stores that not so long ago dominated the retail sector. In a court filing, Chief Financial Officer David Dick attributed the company’s ailing performance to a variety of factors, including “declining mall traffic, a highly promotional and competitive teen retail environment, and a shift in customer demand away from apparel to technology and personal experiences”. But they’re also wrestling with seismic changes in shopping behavior. Aeropostale recently secured $160 million in financing to allow the company to continue to pay wages and benefits while honoring all gift cards and other expenses. The company believes cutting short its stores will help emerge from bankruptcy in next six months.
