Why is Aeropostale store closing? The once-famous mall haunts for teenagers, Aeropostale, filed for Chapter 11 bankruptcy protection. It fell victim to the retail environment’s rapid changes. On May 4, 2016, Aeropostale declared bankruptcy with $354 million in assets. The company shut down 113 of its 739 U.S. locations and all 41 Canadian locations. This was in addition to the 20 closed before the filing. The majority of which were losing businesses and the cause of the company’s losses.
Five years after declaring bankruptcy, Aeropostale and its parent company, ABG, have been gradually refocusing on the brand’s future. As of April 27, 2023, there were 497 Aeropostale stores in the country. Texas has the most Aeropostale stores per capita in the U.S. 53 outlets make up almost 11% of all Aeropostale locations in the U.S.
DiscontinuedNews is impartial and independent, and every day, we create distinctive, world-class programs, news, and content that inform, educate and entertain millions of people worldwide.
A popular American retailer of apparel and accessories is Aeropostale, Inc. It’s a specialty shop with a solid reputation for offering stylish clothing with a well-known brand name. 1987 saw the debut of the very first Aeropostale shops. RH Macy & Co., a recognized behemoth, founded the business in Thousand Oaks, California.
They opened a store in Thousand Oaks and one in Short Hills, New Jersey. The two novel retailers saw enormous success. They were well-liked by the general populace and vital in establishing the clothing brand’s identity. After these two brick-and-mortar businesses achieved their first success, other locations also started to open throughout the nation.
The company’s American retail locations have seen significant success. The brand is well-known all around the world. In addition to the Middle East, Aeropostale has built branches in Europe, Asia, and Latin America. Puerto Rico has branches of them as well. The P.S. for Kids and Aeropostale divisions are among these multinational retailers. Be prepared to find a few Aeropostale stores if you’re a brand fan and are passing by a few malls while traveling abroad.
Aeropostales Ups and Downs
The business has experienced several ups and downs. In March 2007, they were accused of violating a patent. Card Activation Technologies made this claim in a lawsuit against Aeropostale in Illinois. The same breach was also alleged against Aeropostale by Picture Patents, LLC in New York in 2007 and Furnace Brook, LLC in Northern Illinois in July 2009.
The business decided to launch a chain of shops under its parent firm. A total of 14 outlets carrying the Jimmy’Z secondary brand were launched. The stores were thought to be more sophisticated. Also, the apparel and accessories sold under this brand were more costly than
those from Aeropostale. They were aiming to carve out a new marketing niche within the Aeropostale market. The Jimmy’Z line didn’t turn out to be as successful as the firm had intended. All stores that had been opened under the line were eventually shut down.
Despite the poor response to the Jimmy’Z brand, Aeropostale reviewed its strategy. In 2014, they created a new line formally introduced in October of that same year. Aeropostale worked together with well-known video bloggers to create the United XXVI collection. They are Cameron Dallas, Nash Grier, and Hayes Grier. They collaborated with the company to develop a new range of apparel and accessories targeted only at boys and their preferred clothing styles. The new collection has been well received thus far. Also, the fashions are more trendy than goods of a similar nature offered by other businesses.
Financial issues and scandals
One of Aeropostale’s executives was found liable for sixteen offenses in 2006. These included 14 charges of mail fraud, a single charge of wire fraud, and a count of conspiracy. The business’s executive vice president and chief merchandise manager was Christopher Finazzo. He was fired and found liable on 16 charges of criminal activity by the courts.
After thirteen quarters of deficits, Aeropostale was removed from the New York Stock Exchange in 2016. In May 2016, they were compelled to file for Chapter 11 bankruptcy. During this period, a large number of Aeropostale stores were closed. They closed all 41 of Canada’s open stores. Additionally, 113 of the 739 shops opened in the country received help from many capital investment companies. It happened after emerging from bankruptcy in September 2016. As new management took over in January 2017, the company started to turn things around and reopen more than 500 new locations.
How did Aeropostale crash and burn?
In the past, Aeropostale was successful. The teen clothing business Aeropostale hit its pinnacle in 2010. The company’s sales increased to $2.4 billion, and its stock price climbed to an all-time high of $32.24 per share. Also, parent firm Macy’s built the first Aeropostale outlet in Los Angeles’ Westside Pavilion Mall 23 years later.
Then everything came to an end. Aeropostale saw its logo-centric clothing fall out of favor, much like its main competitors in the teen fashion market, American Eagle Outfitters and Abercrombie & Fitch. Aeropostale’s yearly revenues fell to $1.5 billion in 2015. It results from increased competition from quick fashion businesses and a decline in mall traffic.
Early in May 2016, Aeropostale filed for Chapter 11 bankruptcy protection. It happened after 13 consecutive quarters of deficits. 113 of its U.S. sites and 41 of its Canadian ones both announced store closure sales.
Industry experts say Aeropostale sealed its demise by adhering too closely to fashion trends. It was set by the so-called “other two As”—especially Abercrombie & Fitch, which, under the leadership of then-CEO Mike Jeffries, virtually ruled teen fashion in the ten years prior. As a result, Aeropostale has had trouble pivoting because there isn’t much of a fulcrum.
Besides, Shelley E. Kohan tells Retail Dive that Aeropostale’s inability to sell clothing without making huge, margin-eroding discounts further reduces its chances of surviving after Chapter 11.
Why has Aeropostale lost its cool?
When the economy was bad, Aeropostale stood out. It’s because it was the least expensive alternative among the two other teenage industry giants. They were American Eagle Outfitters and Abercrombie & Fitch. Teenagers returned to some of their favorite brands as the economy got better. Still, they continued to demand steep discounts. Due to their tireless efforts to completely revamp their companies, both giants have noticed increased sales. American Eagle, for instance, has been able to reduce its discounts while updating its clothing, like giving its jeans more stretch. But Aeropostale has been hesitant to change with the times.
Aeropostale’s business model is flawed and cannot be rectified without significant restructuring. This is according to a report by Neil Saunders, CEO of retail research firm Conlumino.
Is Aeropostale back in business?
In January 2017, the 500 US locations of the teen retailer were said to reopen after declaring bankruptcy. It is to be noted that the business was acquired by Authentic Brands Group, Simon Property Group, and General Growth Properties in September 2016.
The retailer planned to promote the collection launch and store openings with a marketing campaign. These were announced as happening in February 2017. The stores prepared to sell the new Aeropostale spring 2017 collection. The advertising campaign showcased Aeropostale’s metamorphosis and new branding, which reflect what clients value most.
Marc Miller, CEO of Aeropostale, said, “We are thrilled to reopen over 500 stores across the U.S.” “The staff at our store is excited about the opening of the new Aéropostale and is looking forward to seeing new and recurring customers.”
In the spring of 2016, Aéropostale declared Chapter 11 bankruptcy after years of losses brought on by intense competition. Versa Capital and Sycamore Partners also planned to buy the shop. Finally, a partnership of Authentic Brands Group, Simon Property Group, and General Growth Properties ultimately won the offer for $243.3 million.
Following the acquisition, Aeropostale stated in September that the consortium would run at least 229 US stores, e-commerce, and the global licensing company.
Aeropostale has teamed to provide immersive gaming, socializing, and shopping in the metaverse. Aeropostale has teamed up with MetaversePlus. According to a press release from the firms, the apparel retailer’s presence in the metaverse will begin on March 23, 2023. According to a LinkedIn post by Aeropostale, “Our teams are employed to design, develop, and expand the brand’s presence.” It was done through world-building in the metaverse and offering members-only benefits and promotions.”
According to the press release, the initial phase of Aeropostale’s metaverse goals consists of an offering of NFTs. It gives access to limited-edition clothing, promotions, and a drawing for 10 Tesla cars. Also, the opportunity to be featured on one of the retailer’s digital channels was also given.
A sneak peek into Aeropostale’s metaverse will be provided in the second round of the rollout. According to the press release, members can claim unique avatars, participate in games and events, and accumulate points that can be exchanged for goods and benefits. According to the statement, the third and fourth phase components will be revealed later.