Report: Aéropostale Will File For Bankruptcy Protection This Week

Image courtesy of jpellgen

The Aeropostale Bankruptcy Watch may be over. After initial reports two weeks ago that the company was considering a filing in the coming month, now experts speculate that the troubled teen retailer could file later this week. Timing is key: with 800 stores, the company would need to file before its rent for May is due.

Aéropostale began as a private-label brand for teens in Macy’s stores, which later moved out into its own stores and evolved into a separate publicly traded company. 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.

According to the Wall Street Journal, the chain plans to file for chapter 11 bankruptcy protection and immediately close 100 stores across the country, perhaps making more cuts later in the process. It plans to use bankruptcy to reorganize, and will stay in business.

The last two years have been unkind to midrange teen-focused clothing retailers, with DEB, Wet Seal, and dELiA*s, shutting down, and PacSun reorganizing under bankruptcy protection.

Aeropostale Preparing to File for Bankruptcy This Week [Wall Street Journal]

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