Aeropostale Inc. preparing to file for Chapter 11 bankruptcy

[dmx10101]

Report: Teen apparel retailer close to filing Chapter 11
April 21, 2016 | By Marianne Wilson

Aeropostale Inc. preparing to file for Chapter 11 bankruptcy as soon as this month, Bloomberg reported, citing people familiar with the matter.

Aeropostale has recorded three consecutive years of losses as its struggles to deal with a teen audience whose spending tastes now favor fast-fashion giants such as H&M as well as online retailers. The chain operates some 800 stores nationwide.

In March, Aeropostale announced plans to evaluate strategic alternatives, including a sale of the company. And last week it said it was delaying the filing of its annual report while it explores its options.

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Pressured by newer entrants like H&M and Forever 21, Aeropostale files for bankruptcy protection
Nathan Bomey and Hadley Malcolm, USA TODAY 4:06 p.m. EDT May 4, 2016

If you're a teenager shopping for clothes, you're probably not going to Aeropostale, a fact that became glaringly obvious when the apparel retailer filed for Chapter 11 bankruptcy protection Wednesday.

Fast-fashion brands such as H&M and Forever 21 have put major pressure on the teen retail landscape, upending companies like Aeropostale, which long relied on churning out inexpensive and logo-emblazoned polos and T-shirts whose most fashionable attribute was being able to buy them in a different color. And the company faced a tough proposition in trying to remake itself as a fashion brand when it's been primarily known as a place that sells cheap clothes, retail analysts say.

Now, the company will move quickly to close 113 of its 739 U.S. stores and all 41 of its stores in Canada. Aeropostale expects to use bankruptcy protection to shed debts and restructure its business, remaining in business but likely culminating in a sale of the company.

Ultimately, bankruptcy is only a temporary fix for a brand that needs to redefine its value to customers, says Neil Saunders, CEO of retail analytics firm Conlumino.

"It buys them some breathing space," he says. "What it needs really is a brand reinvention."

Aeropostale's sales have been falling drastically in recent years, declining 18% in 2015. When the company reported full-year earnings results in March, it said it expected to have a loss between $24 million and $29 million in the first quarter this year.

Compared with its traditional teen competitors American Eagle Outfitters and Abercrombie & Fitch, it's been slower to streamline the business and close poorly performing stores, Saunders says. Instead, stores became crowded with old merchandise that failed to sell. Making things worse, new products never appeared too different from past collections.

The brand lost its competitive edge as other stores started rising through the retail ranks with more fashionable items at a better value, says Simeon Siegel, an analyst with Nomura Securities International.

"If your reason for being is simply a cheap price and someone can do it better than you can, then that’s not going to be a good enough reason," says Siegel, who expects more store closures in Aeropostale's future as it attempts to become profitable again.

The retailer said it had secured $160 million in bankruptcy financing from Crystal Financial LLC to keep its doors open and continue paying employees while it navigates bankruptcy.

Aeropostale has about 14,500 employees in all 50 states, Puerto Rico and Canada. It also has 25 P.S. from Aeropostale stores in 12 states and licenses its brand to more than 300 stores in 17 countries. The company has not said when stores will close or how many employees will be affected. Liquidation sales are expected to start as early as May 7.

The company listed $354 million in assets and $390 million in debts in its bankruptcy petition.

The bankruptcy filing comes after a dispute between Aeropostale and one of its largest suppliers, MGF Sourcing, a division of Sycamore Partners, which demanded cash on delivery as the retailer's finances deteriorated, according to a court filing.

"The ripple effects of an ongoing dispute with our second-largest supplier put substantial strain on our liquidity while also preventing us from realizing the full benefits of our turnaround plans," Aeropostale CEO Julian Geiger said in a statement. "As a result, we have chosen to take more decisive and aggressive action to create a leaner, more efficient business that is well-positioned to compete and succeed in today's retail environment."

Aeropostale's bankruptcy follows the recent Chapter 11 filings of competitors such as Pacific Sun, American Apparel and Wet Seal. 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."

Department store chain Macy's launched Aeropostale as a private label brand in the early 1980s and opened the first Aeropostale standalone stores in 1987. The chain was sold along with other Macy's specialty stores in 1998 to Aerospostale executives and other investors. The company went public in 2002.

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Will your Aeropostale close? Here's the list
Nathan Bomey, USA TODAY 9:54 a.m. EDT May 4, 2016

Aeropostale plans to close 113 U.S. stores and all 41 Canada stores as part of its Chapter 11 bankruptcy.

The fashion retailer is exiting certain markets altogether, including Alaska and Hawaii, according to a court filing. The closures include its Times Square location.

Aeropostale said 117 of the stores set to close are not profitable and were responsible for $17 million in losses in 2015, according to a court filing. The other closing stores "experienced poor or negative sales trends and no longer fit within the debtors’ business plan," according to the filing.

The company expects to glean about $21 million in revenue from the liquidation sales, which will last about six to eight weeks, according to the filing.

U.S. liquidation sales are set to begin as early as May 7, while Canadian liquidation sales are set to begin the week of May 9.

The company has some 739 stores in all 50 states and Puerto Rico, 41 stores in Canada and 25 P.S. from Aeropostale stores in 12 states. It also licenses its brand to 322 foreign stores.

Below is a state-by-state list of Aeropostale stores set to close, pending a federal bankruptcy judge's approval, according to a court filing. The list could grow if Aeropostale is unable to restructure its debts expeditiously.

Alabama

Spanish Fort: Eastern Shore Center

Birmingham: Pinnacle at Tutwiler Farm

Alaska

Anchorage: Dimond Center

Anchorage: Anchorage 5th Ave

Fairbanks: Bentley Mall

Arizona

Scottsdale: Scottsdale Fashion Square

Tuscon: Foothills Mall

Arkansas

Little Rock: Park Plaza Mall

Hot Springs National Park: Hot Springs Mall

Rogers: Pinnacle Hills

California

San Jose: Oakridge Mall

Chula Vista: Town Center at Otay Ranch

Los Angeles: Westside Pavilion

Citrus Heights: Sunrise Mall

Chico: Chico Mall

Colorado

Lakewood: Bel Mark

Grand Junction: Mesa Mall

Silverthorne: Outlets of Silverthorne

Connecticut

Waterford: Crystal Mall

Florida

Sarasota: Sarasota Square

Beach: Indian River Mall

Miami: Shops at Sunset Place

Orlando: West Oaks Mall

Estero: Coconut Point

Palm Beach: The Gardens Mall

Georgia

Athens: Georgia Square Mall

Lithonia: Mall at Stonecrest

Macon: Shoppes at River Crossing

Hawaii

Honolulu: Ala Moana Center

Kaneohe: Windward Mall

Aiea: Pearl Ridge Mall

Idaho

Twin Falls: Magic Valley

Chubbuck: Pine Ridge Mall

Illinois

Springfield: White Oaks Mall

Carbondale: University Mall

Geneva: Geneva Commons

Bolingbrook: Promenade at Bolingbrook

Forsyth: Hickory Point

Bourbonnais: Northfield Square

Indiana

Bloomington: College Mall

Wayne: Jefferson Pointe Mall

Kentucky:

Paducah: Kentucky Oaks Mall

Elizabethtown: Mall Towne Mall

Owensboro: Town Square Mall

Louisiana

Monroe: Pecanland

Slidell: Northshore Square

Maryland

Glen Burnie: Marley Station

Ocean City: Ocean City Outlets

Massachusetts

Worcester: Greendale Mall

Michigan

Muskegon: The Lakes Mall

Fort Gratiot: Birchwood Mall

Jackson: Westwood Mall

Traverse City: Grand Traverse

Howell: Tanger Outlet Center Howell

Minnesota

Maplewood: Maplewood Mall

Blaine: Northtown Mall

Woodbury: Woodbury Lakes

Coon Rapids: Riverdale Village

Mississippi

Southaven: Southaven Towne Center

Flowood: Dogwood

Missouri

Columbia: Columbia Mall

Kansas City: Zona Rosa

Branson: Branson Landing

Montana

Missoula: Southgate Mall

Nebraska

Lincoln: Gateway Mall

Omaha: Oak View Mall

Nevada

Las Vegas: Town Square Las Vegas

North Carolina

Asheville: Asheville Mall

New Mexico

Santa Fe: Fashion Outlets of Santa Fe

New York

Amherst: Boulevard Mall

Clay: Great Northern Mall

Buffalo: McKinley Mall

Brooklyn: Fulton Street

New York: Times Square

Ohio

Clairsville: Ohio Valley Mall

Cincinnati: Tri-County Mall

Cincinnati: Eastgate Mall

Heath: Indian Mount Mall

Zanesville: Colony Square

Youngstown: Southern Park Mall

Akron: Summit Mall

Niles: Eastwood Mall

Columbus: Eastland Mall

Oklahoma

Norman: Sooner Fashion Mall

Oklahoma City: Quail Springs

Shawnee: Shawnee Mall

Pennsylvania: Monroeville: Monroeville Mall

Moosic: Shops at Montage

Chambersburg: Chambersburg Mall

South Carolina

Columbia: Village at Sandhill

South Dakota

Rapid City: Rushmore Mall

Tennessee

Chattanooga: Northgate Mall

Cleveland: Bradley Square

Memphis: The Avenue Carriage Crossing

Kingsport: Fort Henry Mall

Texas

Plano: Willowbend

Houston: West Oaks Mall

Hillsboro: Prime Outlets Hillsboro

Lake Jackson: Brazos Mall

San Antonio: Village at Stone Oak

San Angelo: Sunset Mall

Virginia

Christiansburg: New River Malley

Chesapeake: Chesapeake Square

Washington state

Bellingham: Bellis Fair Mall

Bellevue: Bellevue Square

West Virginia

Bluefield: Mercer Mall

Wisconsin

Wausau: Wausau Center

Fond Du Lac: Forest Mall

Wyoming

Casper: Eastridge Mall

[Ameskid]

Ohio

Cincinnati: Tri-County Mall

Cincinnati: Eastgate Mall

Two of my local ones, that's a shame.

Hasn't been a very good year (or thereabouts) for retail on Times Square, has it?

[retailisking]

Can't say I'm surprised by the Greendale Mall store in Worcester, MA closing. That mall is on the verge of foreclosure.

[Retail Fan+ (Justin Hill)]

I'm glad Bay Park Square, Green Bay, Wisconsin is not on that list.

[Hudsons81]

Michigan

Fort Gratiot: Birchwood Mall

Howell: Tanger Outlet Center Howell

Those two are the only ones in the Detroit area that will close. The rest are safe (for now).

[Bdubs]

Waterford,CT in the Crystal Mall doesn't surprise me. That mall is losing tenants at a rapid rate. Overall, just not a high traffic mall like it used to be.

[Pikapower]

Sad that once popular "mall" stores like Gap, Abercrombie & Fitch, and Aeropostale are leaving a lot of malls.  :-\

[TheFugitive]

Michigan

Muskegon: The Lakes Mall

Fort Gratiot: Birchwood Mall

Those two are the only ones in the Detroit area that will close. The rest are safe (for now).

Muskegon is nowhere near Detroit.
It's on Lake Michigan, northwest of Grand Rapids.

[Hudsons81]

Michigan

Muskegon: The Lakes Mall

Fort Gratiot: Birchwood Mall

Those two are the only ones in the Detroit area that will close. The rest are safe (for now).

Muskegon is nowhere near Detroit.
It's on Lake Michigan, northwest of Grand Rapids.

I meant the Howell location, but for some reason put in Muskegon instead.

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End of the road for former teen apparel giant?
July 19, 2016 | By Marianne Wilson

It appears that Aeropostale Inc., which declared Chapter 11 bankruptcy in May, will be selling its assets rather than reorganizing.
     
The teen retailer said in court papers that “reorganization on a standalone basis is not feasible.” Instead, it will look for a “stalking horse” to make the lead bid at an auction next month, Bloomberg reported.

The proceeds of any sale will go to Aeropostale's creditors. The company listed $390 million in debt and about $354 million in assets in its Chapter 11 petition. It said it would try to hold an auction Aug. 22, if there is any indication of competitive interest.

Aeropostale also said it is still reviewing 11,000 pages of documents and depositions of key individuals that senior lender Sycamore Partners produced during a bankruptcy probe and is evaluating whether to pursue claims against the private equity firm and affiliates, the report said.

In its Chapter 11 filing, Aeropostale asked the court for permission to investigate its largest secured creditor, Sycamore Partners, saying Sycamore used a supplier it controls â€" MGF Sourcing â€" to help drive it into bankruptcy. 

“While our merchandise repositioning have started to gain traction, the ripple effects of an ongoing dispute with our second-largest supplier put substantial strain on our liquidity while also preventing us from realizing the full benefits of our turnaround plans,” stated Aeropostale CEO Julian Geiger at the time of the filing.

Aeropostale has recorded three consecutive years of losses as its struggles to deal with a teen audience whose spending tastes now favor fast-fashion giants such as H&M as well as online retailers.

[retailisking]

A $243 million bid from a consortium of liquidators and other firms may rescue Aeropostale, though it will be a drastically smaller chain if the bid is accepted. Curiously, two leading mall operators (Simon and General Growth) are part of the consortium.
http://fortune.com/2016/09/02/aeropostale-bankruptcy-auction/

[TRU7536]

http://fortune.com/2016/05/04/aeropostale-stores/

list of stores closing, Meriden and Waterford are closing in CT. Connecticut stores that were to stay open included ones at Manchester’s Buckland Hills mall and in Enfield Square mall, as well as in Westfarms Mall in West Hartford

[retailisking]

http://fortune.com/2016/05/04/aeropostale-stores/

list of stores closing, Meriden and Waterford are closing in CT. Connecticut stores that were to stay open included ones at Manchester’s Buckland Hills mall and in Enfield Square mall, as well as in Westfarms Mall in West Hartford

Those are the stores that were announced in May IIRC. There should be a second, much larger list if the consortium bid is approved.

[retailisking]

Turns out that there will be more surviving stores - about 400 overall - due to the involvement of mall operators which include rent reductions
http://www.chainstoreage.com/article/unusual-deal-gives-aeropostale-new-lease-life--and-it-just-got-better