Aeropostale Cuts Jobs, Closes Retail Stores
Aeropostale Inc. will cut jobs and close stores as part of the clothing retailer’s efforts to turn its business around.
The company said Wednesday that it will close 125 of its mall-based P.S. from Aeropostale stores by the end of its current fiscal year, citing changing consumer habits, particularly among "mom" shoppers, as its rationale. It plans to remove the kids’ clothing stores from malls and focus on faster-growing venues for growth, such as online sales, outlet stores and licensing deals.
Aeropostale said that in addition to the job cuts associated with the closures, it plans to eliminate about 100 corporate jobs as part of a cost-saving measure.
The company expects pre-tax savings $30 million to $35 million annually from the moves and reiterated its first-quarter outlook.
Aeropostale said it is still working with an outside adviser as part of its strategic business review process.
The company has been struggling with waning popularity, a risk for many teen-focused retailers. A tough holiday season and extreme winter weather also hurt many retailers.
Aeropostale reported its fifth consecutive quarterly loss in March and said it is giving private equity firm Sycamore Partners a larger stake in its business.
Shares in the New York-based company are down about 45 percent so far this year. They rose about 1 percent in after-hours trading following the announcement.