A recent court filing by Aeropostale reveals the company’s plans to completely exit certain sales markets, including Hawaii, Alaska and Canada. In total, the company will shutter 113 stores in the U.S. and 41 in Canada. One of the stores that will be closed is located here in Worcester.
The court paperwork says that 117 of the stores that will be closing were responsible for $17 million in losses last year. The other stores that will be closed have also shown poor sales trends. These stores don’t fit with the debtor’s business plan that is in place after the company’s Chapter 11 bankruptcy filing.
Aeropostale has 739 stores in the U.S.and Puerto Rico. There are also another 25 P.S. from Aeropostale stores, which are located in 12 states. There are 322 stores located in other countries Should the company be unable to quickly restructure its debts, other stores could be closed.
The company hopes that it will soon see about $21 million from the stores that will be closing as their merchandise begins liquidating. It is expected to take six to eight weeks for the liquidating stores to close.
In its bankruptcy filing, Aeropostale listed $390 million in debts and $354 million in assets. The bankruptcy was filed after Aeropostale and MGF Sourcing got into a dispute. The sourcing company wanted to get cash on delivery after it learned that the corporate finances were declining.
When a business files for Chapter 11 bankruptcy protection, it is trying to restructure its debts so that it can emerge from bankruptcy in better shape financially. An attorney can provide you with additional information on Chapter 11 bankruptcy.
Source: USA Today, “Will your Aeropostale close? Here’s the list,” Nathan Bomey, May 04, 2016