New York-based American shopping mall-based casualwear retailer Aéropostale Inc is mulling over change in its strategy, including sale and restructuring.
Once a fast fashion teen retailer, Aéropostale has recorded 16 per cent drop in quarterly sales 13 straight quarters, as it gave heavy discounts only to attract shoppers, as well as closed unprofitable stores. After such disastrous losses, the company is even considering a sell-off of assets.
The retailer is also likely to face liquidity constraints if it failed to resolve a supply dispute with a key vendor, MGF Sourcing. According to Aeropostale, the dispute with MGF Sourcing, an affiliate of Sycamore Partners, was disrupting supply of some merchandise, while MGF Sourcing maintained that it is not violating the sourcing agreement with the company.
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Aéropostale CEO Julian Geiger said the company plans to differentiate its apparel offerings between its larger, so-called factory stores and its mall outlets. About the plan, Geiger said, “We believe that our revised merchandise assortment and our more targeted merchandise allocation approach in our factory chain will reinvigorate our stores, delivering our customers the product and shopping experience they desire.”
Although Aeropostale continues to struggle with falling sales, its rivals, such as American Eagle Outfitters Inc and Abercrombie & Fitch Co, have managed to turn their businesses around by controlling inventories and responding faster to changing fashion trends.
Aeropostale’s inventory was down 8.1 per cent in the fourth quarter, ended January 30. The company’s stock closed at 45.83 per cent at 25 cents a share.
