After losing income for 13 consecutive quarters, today [Wednesday, May 4] embattled teen retail store Aeropostale has filed for bankruptcy in New York court.
The company revealed it would be closing 113 of their 739 stores in the U.S. along with 41 in Canada. With a debt totaling at $390 million, Aeropostale expects to use the bankruptcy to restructure the business.
According to court statements, the retailer has secured $160 million in financing from Crystal Financial LLC and will continue to take on new employees with pay while making a comeback.
The bankruptcy came from a dispute between the company and one its biggest suppliers, MGF Sourcing. According to the court filing, the effects on the ongoing dispute put a strain on the company after cash was demanded on delivery as the finances deteriorated.
As a result, Aeropostale has decided to take a more decisive and aggressive step that will help succeed the brand in the modern retail business.
The department store Macy’s was the first to launch the brand in the early 1980s and its first standalone store came about in 1987. The company has maintained however declining mall traffic and the competitive teen retail market caused a serious shift.
