Aeropostale Bankruptcy Watch is officially over, because, well, the teen apparel chain went ahead and did what everyone has been predicting for the last few weeks and filed for Chapter 11 bankruptcy protection.
After years of losses and watching shoppers move on to online competitors and fast-fashion retailers, Aeropostale bit the bullet and filed for bankruptcy on Wednesday, Reuters reports.
Aeropostale thinks it should be ready to emerge from bankruptcy within six months, after closing 113 U.S. stores and all 41 stores in Canada. But will fewer stores solve its problems?
“Aeropostale will likely emerge from Chapter 11 as a leaner entity with a smaller, but largely profitable, store base…but it does not solve the issue of relevance to the market,” Neil Saunders, chief executive of research firm Conlumino told Reuters.
He adds that bankruptcy will give Aeropostale time to think about how to become relevant to shoppers, but won’t provide a long-term solution in itself.
The chain thrived in the ’80s and ’90s, but is now caught between competitors in the teen market like archnemesis American Eagle, as well as the upmarket Abercrombie & Fitch and cheaper fast fashion retailers that also cater to teens and children.
Aeropostale is the latest formerly popular teen chain to fold in recent months: DEB, Wet Seal, and dELiA*s, have closed their doors, while PacSun is reorganizing under bankruptcy protection.
Teen apparel chain Aeropostale files for bankruptcy protection [Reuters]
by Mary Beth Quirk via Consumerist
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