Aeropostale said it would close 113 of its more than 700 locations in the United States and close all of its 41 locations in Canada in its effort to “achieve long-term financial stability.”
The retailer, which has been losing money for 13 straight quarters, listed assets of $354 million and debts of $390 million in its Chapter 11 filing, according to Cable News Network (CNN).
Store-closing sales are expected to begin Saturday in the United States and May 9 in Canada.
Aeropostale said it would emerge from bankruptcy within six months, aided by $160 million in financing from Crystal Financial LLC.
Meanwhile, Aeropostale said it would continue to seek potential buyers and that any sale would be announced within the six months, CNN said.
Aeropostale was delisted from the New York Stock Exchange in April for having too low of a share price.
But the teen retailer, which also operated dozens of P.S. from Aeropostale stores that sold children’s clothing, said bankruptcy would enable it to get out of or renegotiate some “burdensome” contracts and resolve its long-running dispute with Sycamore Partners, a former investor.
“While initiatives such as the implementation of our two-chain Factory and Mall strategy and our merchandise repositioning have started to gain traction, the ripple effects of an ongoing dispute with our second-largest supplier put substantial strain on our liquidity while also preventing us from realizing the full benefits of our turnaround plans,” CEO Julian Geiger said in a written statement.
“As a result, we have chosen to take more decisive and aggressive action to create a leaner, more efficient business that is well-positioned to compete and succeed in today’s retail environment,” he said
Aeropostale appears to have been a victim of the fast fashion trend, in which more-nimble emerging retailers H&M, Zara and Forever 21 have been able to keep up with rapidly changing fashion trends while larger, older companies have fallen behind.
Sales declines at Aeropostale had accelerated recently despite aggressive discounting, CNN said, citing a 16 percent falloff in the most recent quarter.
