Aéropostale is on the Verge of Bankruptcy

by San Antonio Attorney

Aéropostale appealed to teenagers because it was less pricey than its racy competitor A&F, and it was not like the American Eagle either.

But Aéropostale is on the verge of bankruptcy and closing 100 shops, according to reports.

There were speculations earlier that the clothing company was preparing to file for Chapter 11 bankruptcy.  Aéropostale stock dropped almost 30% down to $0.15 after the report, forcing the New York Stock Exchange to suspend trading in the retailer company.

The Wall Street Journal had previously reported that Aéropostale was planning to restructure or possibly sell the company.

This happened after a hard fiscal 2015.  For the whole of fiscal 2015, revenue went down 8.6%.

The ongoing status of the retail industry has been making it worse for Aéropostale’s salvation.

Right now mall retailers are having are hard time.  Retailers that are not fast moving often cannot compete with retailers that can swiftly clear inventory.  They are usually forced to go into the promo cycle.  This difficulty, along with not so appealing designs, has led to Aéropostale’s cash problems.

Shoppers have been overlooking Aero mainly because its styles have become irrelevant.  The tastes of consumers have changed but Aero has persistently clung to a style that is no longer trendy.

Aéropostale tried to appeal to young people.  The company tapped Youtube star Bethany Mota to design clothes in Aero since late 2013.  But not even a social media celebrity with 10 million followers could save the brand from sinking.

The retail company has resorted to giving big discounts in order to rouse demand.

The company’s looming bankruptcy filing will be the most recent in an increasing list of big retailers to do so.  Quicksilver, Wet Seal, Sports Authority and Pacific Sunwear are some of the retailers to file for bankruptcy protection lately.

Leave a Comment

Previous post:

Next post: