NEW YORK CITY—Following what the company calls a strategic business review, apparel retailer Aeropostale, Inc. reports it will close approximately 125 shopping mall-based P.S. from Aeropostale stores by the end of fiscal year 2014. The company, as part of its restructuring, also plans to reduce its corporate headquarters workforce here by approximately 100 positions.
The company says the store closing and job reduction initiatives will generate approximately $30 million to $35 million in annualized pre-tax savings, of which approximately $5 million to $10 million is expected to be achieved in fiscal 2014.
Aeropostale, which is a retailer of casual apparel for young men and women, plans to restructure the P.S. from Aeropostale brand to focus on faster growing sales channels, including off-mall locations (including outlets), e-commerce, and international licensing. The company is also exploring other potential third party distribution channels.
The company estimates that it will record pre-tax restructuring, asset impairment, and other charges of approximately $40 million to $65 million during fiscal 2014 related to these actions, of which approximately $25 million to $40 million are estimated to be cash expenses.
"The steps we are announcing today build on our turnaround efforts from the past year," says Aeropostale CEO Thomas P. Johnson. "Through the restructuring of our P.S. from Aeropostale brand, and expansion of our expense savings program, we will be better positioned financially and have laid the groundwork for the future.”
Global business advisory firm, AlixPartners LLP, served as advisor during the company's strategic business review process. Aeropostale says it continues to work with real estate consultants to optimize its real estate portfolio.
The company also reports that it continues to expect first quarter 2014 operating losses in the range of $64 million to $68 million or a net loss in the range of $0.70 to $0.75 per diluted share.
Aeropostale currently operates 854 Aeropostale stores in 50 states and Puerto Rico; 77 Aeropostale stores in Canada and 150 P.S. from Aeropostale stores in 31 states and Puerto Rico. In addition, pursuant to various licensing agreements, its licensees currently operates 117 Aeropostale locations and one Aeropostale and P.S. from Aeropostale store in the Middle East, Asia, Europe, and Latin America.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
