Aeropostale is Still Probably Going to Go Out of Business

Last year, I said Aeropostale would go out of business because of its low inventory and sales. Then I said it again because of its even lower inventory and discounts. Now, it seems even more possible that the company will go out of business as it has filed with the U.S. Bankruptcy Court to change its corporate name to “ARO Liquidation”.

According to an article on Bankrupt Company News, Aeropostale has filed with the U.S. Bankruptcy Court to change its corporate name to “ARO Liquidation”. The news comes a year after the company filed for chapter 11 bankruptcy and was acquired by a retail group led by Simon Property Group and General Growth Properties Inc.

The filing explains,

on September 13, 2016, the Court entered two orders approving the transactions contemplated by the Asset Purchase Agreement by and among the Debtors and Aero Opco (the ‘Buyer’) and the Agency Agreement by and among the Debtors and Aero Opco, Hilco Merchant Resources, and Gordon Brothers Retail Partners, (collectively, the ‘Agent’), each dated September 12, 2016. Pursuant to these transactions (together, the ‘Sale Transaction’), which closed on September 15, 2016, the Debtors sold their trade names and intellectual property rights to the Buyer. Consistent with such sale, and at the request of the Buyer, the Debtors seek an order authorizing and directing the Debtors to change their respective corporate names as follows: Aeropostale to ARO Liquidation.

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Last year in May, Aeropostale filed for chapter 11 bankruptcy. The brand said it would close 154 stores in the United States and Canada. It listed its 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 General Growth Properties Inc. won an auction for the assets of Aeropostale Inc. The group purchases the brand for $245 million with a plan to keep 229 stores open. That is a much lower than the 646 stores that would have remained open if only 154 stores were closed.

The brand also seemed to be liquidating its inventory. The brand was offering 70% off everything in all closing stores and began doing it online as well. There were many online sales during the summer but the brand started offering 70% off everything before Thanksgiving and on Black Friday and continued to do so for a couple of weeks.

Then, just before Christmas, the brand began offering 75% off everything online and in stores. The brand offered this for the holidays and for a couple of weeks after.

All sales from the brand were final as well. When buying a product at one of the closing stores, a cashier would put a stamp on it that said “final sale.” I bought a pair of jeans from the brand and the receipt said I couldn’t return anything in stores. It did, however, say I could exchange the item online but didn’t mention anything about returns. Also, if you went to Aeropostale.com and clicked on a clothing category there would be a banner that said “all sales final”.

What’s more, the brand didn’t release any new products for the season. Where you’d expect to find sweaters, coats, and other fall and winter items there were t shirts, tank tops, and shorts. The brand, however, finally released new products earlier this year in February but was still offering them on discount.

It was said that Aeropostale would relaunch as a smaller brand after being acquired by the retail group but it seems it might not. The brand’s filing to change its corporate name to “ARO Liquidation” shows the brand will still probably go 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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