Teen retailer Aeropostale, one-time mall king, files for bankruptcy
Aeropostale, once a vibrant epicenter for teens at U.S. malls, is seeking Chapter 11 bankruptcy protection and closing 20 percent of its stores in North America.
The New York-based company said Wednesday that it is closing 113 of its 739 U.S. stores and all 41 locations in Canada. Going-out-of-business sales at those U.S. stores will begin this weekend.
A Plano store is among those being closed, but the retailer will keep its Tarrant County stores operating at the Parks at Arlington, Hulen Mall, North East Mall, Grapevine Mills and Southlake Town Square.
Aeropostale expects to emerge from bankruptcy protection within six months as a smaller company after renegotiating contracts and resolving an ongoing dispute with the investment firm Sycamore Partners, a major shareholder that pushed through changes in company leadership.
In the filing, CEO Julian Geiger lashed out at Sycamore, which he accused of hampering the company’s turnaround plans.
“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,” he said in a company release. “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.”
Almost every teen retailer has suffered under a vastly altered consumer landscape that took root during the recession. “Fast fashion” outfits like H&M and Forever 21, with more inexpensive 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.
Once worth almost $2.6 billion, Aeropostale’s market capitalization has fallen to about $2 million.
Staff writer Steve Kaskovich contributed to this report.
This story was originally published May 4, 2016 at 4:20 PM with the headline "Teen retailer Aeropostale, one-time mall king, files for bankruptcy."