After filing for bankruptcy, Aeropostale is closing stores and liquidating its inventory in those stores. The brand has also been acquired by a retail group for $243.3 million. Some say the deal could help the brand become popular again but after visiting Aeropostale.com the brand seems to be going out of business.
Aeropostale filed for chapter 11 bankruptcy earlier this year in May. The brand said it would close 154 stores in the United States and Canada. It listed assets at $354 million while its debt is at a total of $390 million and has secured $160 million in financing.
A couple of months later, a retail group led by Simon Property Group Inc. and and General Growth Properties Inc. won an auction for the assets of Aeropostale Inc. The group purchased the brand for $243.3 million with a plan to keep at least 229 stores open. That is a much lower amount than the 646 stores that would have remained open if only 154 stores were closed.
Along with closing its stores, Aeropostale is liquidating its inventory. The brand has been offering 70% off everything in all closing stores but now the brand seems to be doing it online as well.
Like almost every other brand, Aeropostale has had holiday sales. They had a sale during the week of Thanksgiving, offered 70% everything online and in stores on Black Friday, and continued the sale for Cyber Monday and throughout the week. Cyber Monday was over a week ago and the brand is still offering 70% off everything. This is in addition to all the sales the brand has had before the holidays, offering discounts every week.
When buying a product at a closing store, cashier put a stamp in your receipt that says “final sale.” All online sales seem to be final as well. You can exchange products, but it seems as if you can’t return them. I recently bought a pair of jeans online and the receipt said I couldn’t return the item in stores. As for the online policy, the receipt said I could exchange the item for another size but did not mention anything about returns.
What’s more, the brand isn’t offering any new styles or products for the season. Where you’d expect to find sweaters, coats, and other fall and winter items, there are t shirts, tank tops, and shorts. Pretty everything that has been available all summer is still on the website. The only in season items you can find are a small selection of scarves and gloves.
That won’t help much in competing with H&M, Zara, and Forever 21. Those brands are popular brands, keep up with trends, and release new products every week or so. American Eagle’s same store sales have, however, declined by about 2%-4% in locations near Aeropostale’s closing stores.
Despite discounts and sales, none of the available products are selling out. Pretty much all size are available for all products. Aeropostale may just be selling and manufacturing a small selection of products or the brand might not be selling enough.
Regardless, having discounts well after Back Friday and Cyber Monday, final sales, no new inventory, and only offering a small selection of clothing are indicative of declining sales. It may be part of the brand’s plan to sell during bankruptcy but it seems Aeropostale might just be going out of business.
So, what do you think? Is Aeropostale going out of business? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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