|
 Aeropostale said it plans to finance its operations during its
bankruptcy through a $160 million loan from Crystal Financial LLC
combined with operating cash flow, according to a court filing.
(http://1.usa.gov/21vjWta).
The company said it expects to emerge out of bankruptcy within six
months with a resolution of its disputes with former shareholder
Sycamore Partners, which had thrown a lifeline of $150 million to
the retailer in 2014.
"Aeropostale will likely emerge from Chapter 11 as a leaner entity
with a smaller, but largely profitable, store base...but it does not
solve the issue of relevance to the market," said Neil Saunders,
chief executive of research firm Conlumino.
The mall-based retailer said it would close 113 U.S. stores and all
41 stores in Canada.
"Rethinking the brand proposition is key to improving prospects.
Chapter 11 buys Aero time and space to undertake this rethink. In
itself does not provide a long-term solution," Saunders said.
The difficult market for teen apparel has triggered bankruptcy
filings by high-profile retailers such as American Apparel Inc,
Quiksilver Inc and Sports Authority Inc in the past year.
Online retailers and fast-fashion retailers such as H&M, Forever 21
and Inditex's Zara have posed a threat to traditional apparel
retailers, but American Eagle Outfitters Inc and Abercrombie & Fitch
Co have managed to turn around their businesses by controlling
inventories and responding faster to changing fashion trends.
Aeropostale said in March it was exploring strategic alternatives,
including a sale, citing a dispute with a vendor, MGF Sourcing US,
an affiliate of Sycamore Partners.
[to top of second column] |
Established by R.H. Macy's & Co in the early 1980s, Aeropostale made
its stock market debut in 2002 but the New York Stock Exchange
delisted the shares in April.
The company operated 739 Aeropostale stores in 50 states and Puerto
Rico and 25 P.S. from Aeropostale stores in 12 states, as of May 1.
The company listed assets in the range of $100 million to $500
million, and liabilities of $100 million to $500 million
The case is in U.S. Bankruptcy Court, District of New York, Case No:
16-11275.
(Reporting By Aurindom Mukherjee and Subrat Patnaik in Bengaluru;
Editing by Sunil Nair and Don Sebastian)
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