Is Aéropostale On The Brink Of Extinction?

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aeroembedPhoto: Courtesy of Aeropostale.
Aéropostale has always played the underdog to clean-cut sibling staples American Eagle and Abercrombie & Fitch. But, lately, things have been looking particularly grim for the preppy-light brand. Friday, its stock plunged 20%, closing out at its lowest price in more than a decade. In the wake of reporting a rocky fourth quarter and yearly sales decline of 12% (down to $2.09 billion), the chain’s shares quickly plummeted to a new low of $5.83. Given that Aéropostale’s stock soared as high as $32.08 a share only four years ago, this is quite a troubling sign.

What has gone wrong for the once-popular mall chain? It's dated. Arguably, its quasi-collegiate aesthetic has fallen out of favor, and the logo-centric look of Aéropostale's traditional sportswear isn't as big as it once was. Instead, most young consumers aim to recreate high-fashion looks at reasonable prices. Forever 21 and H&M provide rapidly served approximations of runway looks, and Aéropostale has been unable to compete with that. Not to say it hasn't tried to evolve: The brand teamed up with the show Pretty Little Liars and teen video blogger Bethany Mota to update its image. But, the numbers don't lie: Those cross-marketing efforts were costly experiments that weren't nearly as fruitful as they needed to be.

No one is saying "RIP" just yet, but the writing may be on the wall. Only three months into 2014 and Aéropostale is already reporting a $68 million loss — up to $150 million financing costs may also be at stake. For now, the brand says it plans to close 50 stores and two P.S. for Kids, and it has hired a real-estate consulting firm to assess future closures. For nostalgia's sake, let's hope it can turn things around. We wouldn't want it to go the way of Radio Shack. (BuzzFeed)