Aeropostale is preparing to file for bankruptcy this week and could close more than 100 stores, according to people familiar with the matter.
The teen-focused retailer will seek chapter 11 bankruptcy protection and is already in talks with lenders to finance operations through a restructuring.
Sales plunged 16 percent in the recent quarter for a $22 million loss. Problems with a key vendor have made matters worse, causing supply chain disruption. In March, the company said it was exploring strategic alternatives, including a potential sale.
Close to 100 of the chain's 800 locations are likely to be shuttered, although more could be added later. The goal is to restructure and emerge, reported The Wall Street Journal.
Aeropostale began as a private-label brand, then opened stores in the mid-1980s and became a public company in 2002. But the brand has fallen prey to the same issues plaguing fellow teen retailers Abercrombie & Fitch and American Eagle Outfitters, struggling to adapt to the changing demographic and compete with fast-fashion powerhouses Forever 21 and H&M.
Fellow teen retailer PacSun filed for bankruptcy in April.
- see this Wall Street Journal article (tiered subscription)
Aeropostale looks for a buyer
Aeropostale names new COO, CFO
Despite minor gains, Aeropostale plans to close up to 75 stores