Struggling teen retailer Aeropostale (NYSE: ASO) is working with Barclays to evaluate various ways to raise capital after four consecutive quarters of losses. The company is said to be considering the sale of a convertible note or preferred stock to a private-equity firm, people close to the matter told Bloomberg Businessweek.
Aeropostale is facing pressure from investors to sell itself, the sources said, and has contacted at least two buyout firms to determine its alternatives. Activist investor Crescendo Partners has been urging Aeropostale's management, sending a letter in November requesting that the company find a buyer. Crescendo has not disclosed the size of the stake it owns in Aeropostale, but said that together with its affiliates it is a "significant stockholder."
Aeropostale has been desperately trying to turn the business around in the past year. In the most recent quarter ending Nov. 2, Aeropostale reported a net loss of $25.6 million. Sales fell 15 percent to $514.6 million, below the analysts' average estimate of $520.2 million. Aeropostale's comparable store sales declined by almost 15 percent due to heavy promotional activities and low store traffic. The company has struggled to resonate with its core teen audience as basic product offerings have not been well received. The company is also said to be closing 40 underperforming units this year.
-See this Bloomberg Businessweek article
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