Aeropostale to Close More Stores Than Planned

by William White | August 23, 2013 10:55 am

Aeropostale to Close More Stores Than Planned

Aeropostale 2 Aeropostale to Close More Stores Than Planned[1]Aeropostale (ARO[2]) announced on Thursday[3] that it suffered losses during its second quarter.

Aeropostale sales were down 15% during the company’s second quarter. This resulted in a 6% loss of revenue for the company. The poor sales have prompted Aeropostale to double the stores that it will be closing to this year to 30 or 40 locations. Aeropostale currently has 1,119 stores open. The loss of sales it likely due to the the company rebranding itself. Aeropostale is trying to change itself into a high-end clothes store. The higher prices on clothing has resulted in the company having to mark down many of its clothes to make sales, reports The Washington Post.

The company may also be losing sales due to its target audience, teenagers. Teenagers often jump from store to store based off of changing fashion trends. This can result in stores seeing bad sales during one quarter, but doing great it the next. Teenagers also have to make their clothing decisions based off of how much their parents are willing to spend. Aeropostale’s higher prices might be causing parents to move away from the clothes retailer.

Aeropostale isn’t the only clothes store that saw losses during the second quarter. American Eagle Outfitters (AEO[4]) saw a 2% loss[5] in revenue and Abercrombie & Fitch (ANF[6]) saw a 1% loss[7] in revenue.

ARO shares were down 18%, AEO shares had dropped 1% and ANF shares had decreased 1% as of Friday morning.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/Aeropostale-2.jpg
  2. ARO: http://studio-5.financialcontent.com/investplace/quote?Symbol=ARO
  3. announced on Thursday: http://www.washingtonpost.com/business/aeropostale-reports-2q-loss-issues-dim-forecast-and-plans-to-close-more-stores-as-sales-slump/2013/08/22/29989ccc-0b6c-11e3-89fe-abb4a5067014_story.html
  4. AEO: http://studio-5.financialcontent.com/investplace/quote?Symbol=AEO
  5. 2% loss: http://www.bostonglobe.com/business/2013/08/21/traffic-drop-hurts-american-eagle-outfitters/y2dcAkfkhlWI6YK9dOVryO/story.html
  6. ANF: http://studio-5.financialcontent.com/investplace/quote?Symbol=ANF
  7. 1% loss: http://www.independent.ie/business/world/abercrombie-fitch-shares-plummet-after-profits-fall-far-below-expectations-29520580.html

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