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Aeropostale Files for Bankruptcy

Posted on in Corporate Bankruptcy

Aeropostale Files for Bankruptcy

Following news earlier this year about Quiksilver and PacSun filing for bankruptcy, another once-popular teen clothing brand, Aeropostale, has filed for bankruptcy after suffering financial troubles for 13 consecutive quarters. The retailer listed $354 million in assets and $390 million in debts in its Chapter 11 bankruptcy filing. It has secured $160 million in financing from Crystal Financing, LLC. The company is still trying to find a buyer so it can continue to operate and become profitable once again. As a measure to save money, the retailer is planning to close 113 of its stores in the United States and all of its 41 stores in Canada.

Trends come and go and with these trends, retailers come and go. Some apparel brands, like Nike, have a timeless appeal while others, like Quiksilver, experience ebbs and flows in popularity as the public's tastes change. A key component to a brand's timelessness is its ability to adapt to the public's changing tastes, rather than allowing itself to become “stuck” by failing to move past a specific trend. An example of a clothing brand that failed to move past its initial success is Members Only, a jacket brand that is now associated strongly with the dominant style trend of the 1980s.

A Change to How We Buy Clothing

Aeropostale is just one of many moderately-priced clothing brands that suffered from the rise of fast fashion. Fast fashion is a trend characterized by supply chain optimization, intended to bring the latest styles from the catwalk to the consumer at a breakneck speed with a low purchase price for the consumer. These low prices allow consumers to buy more pieces on a more frequent basis, rather than choosing timeless pieces as an investment to wear season after season. Brands associated with fast fashion include H&M, Zara, and Forever 21.

This trend puts a specific pressure on brands like Aeropostale – the pressure to keep prices low, which causes retailers to discount items heavily or opt for lower-quality products. Other brands that have felt pressure from fast fashion retailers are Banana Republic and American Eagle.

Can brands like Aeropostale survive in this changed fashion market? Only time will tell. Two of the greatest criticisms of fast fashion are its impact on the environment and the conditions in which the people producing the clothing live and work. The market is driven by consumer desire and at this time, consumers are still driven to low prices despite the problems that accompany them.

Work with a Chicago Bankruptcy Attorney

Chapter 11 is one of many types of bankruptcy. Each type, known as a chapter, is designed to help individuals and companies with specific financial needs overcome their debt burdens. To learn more about bankruptcy and discuss your own debt relief needs, speak with a member of our team of bankruptcy attorneys at Newland & Newland, LLP. Contact our firm today to schedule your free initial consultation with us. Our firm is located in the prestigious 180 North LaSalle Street building in Chicago.

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