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Can Aéropostale Make a Comeback?

The fall of a big name mall brand

Department store Macy's first announced it was expanding one of its private labels, Compagnie Generale Aéropostale, into a brick-and-mortar concept in September of 1987. The label had been named after an airmail carrier that operated between France and South America but Macy's decided to call its stores Aéropostale.


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A men and women's clothing line, Aéropostale's first stores were in New Jersey and California, and it sold "rugged leisure," according to the New York Times; its clothing was "inspired by the aviators of the 1920's French airmail service." Crain's New York noted it was "blatantly modeled on Banana Republic," but shoppers still immediately took to its bomber jackets, baggy pants, and khaki staples.

With its eyes set on a new market of shoppers, it began to rake in profit by selling "simple shirts, T-shirts, pullover sweaters in pastel colors, and full-cut trousers."

By 1989 the chain had expanded into 35 locations nationwide but it had turned into more of a "themed shop, based on a trend," according to the LA Times. It had moved on from its aviation style, where its clothing mimicked classic 1940's looks a la "Casablanca." With its eyes set on a new market of shoppers — teenagers, ages 14 to 17 — it began to rake in profit by selling "simple shirts, T-shirts, pullover sweaters in pastel colors, and full-cut trousers."

Over the next few years, Aéropostale rapidly expanded, and when Macy's sold it to Bear Stearns Merchant Banking l (now called Irving Place Capital) ) in 1998, it had more than 100 locations around the country. Four years later, when it filed for IPO in May of 2002, its presence had nearly tripled : It had 278 stores, which brought in almost $305 million net sales in 2001.

Although it faced fierce rivalry from competitors Abercrombie & Fitch and American Eagle, which also targeted teen shoppers — the trio eventually formed a unique category, referred to as "the three A's" by the retail industry — Aéropostale still managed to become "one of the most popular retailers in the country, especially with teen-agers," Tennessee's Leaf Chronicle reported in 2002. It had hit a sweet spot with "affordably-priced graphic tees, colorful sweaters, casual bottoms, dorm gear, accessories, and the latest in denim that makes the company stand apart as truly someplace special."

Teens are now shopping differently, and no one knows this better than Aéropostale.

A lot has changed. Teens are now shopping differently, and no one knows this better than Aéropostale. Last week, the teen retailer filed for Chapter 11 bankruptcy, and announced it would close 113 of its some 800 locations, including all 41 stores in Canada. Aéropostale joins a whole slew of teen brands that used to be anchors at local malls and are now buckling under pressure: Wet Seal, PacSun, Delia's, Deb, just to name a few.

In its filings, Aéropostale's revealed it has debts that include loans of about $223 million. It also accused Sycamore Partners, its largest creditor that owns one of its suppliers, of purposefully distrusting its business and pushing it into bankruptcy by demanding cash. But Aéropostale has been struggling for years. Sales have fallen for five years straight: In 2015, sales fell to $1.5 billion, down from $2.4 billion in sales in 2010, and last month it was delisted from the stock market because it had an abnormally low trading price (15 cents!). Two years ago, the brand was all over headlines after it closed 125 stores from its kids' line, P.S., and was reportedly being pressured to take its business private because it kept losing money every single quarter.

How did such a mighty retailer like Aéropostale fall?

Retail experts say Aéropostale was slow to let go of the look teen retailers were pushing for so many years.

"They are still so focused on hoodies and their logos, they don't even see the market changing aggressively," retail analyst Brian Sozzi told Racked in 2014. "They are milking a dead cow."

Aéropostale was slow to let go of the look teen retailers were pushing for so many years.

Apparel covered in a brand's logo and name used to sell like hot cakes at stores like American Eagle and Abercrombie — teens would drop as much as $100 for a velour hoodie with a J on its zipper, from Juicy Couture — but the style ultimately shifted. A company like Brandy Mellville, for example, mysteriously popped up in 2009. Suddenly boho blouses and baggy and high waisted jeans were more appealing options for teens. New retailers of the digital age, like Nasty Gal and ShopJeen, were also quick to create a system of trend-churning. Aéropostale, though, was way too invested in its previous characteristics to give their classic styles up.

"Teens are more interested in jean cut-offs, boho-leaning, and fake vintage styles," Hazel Cills, a former teen blogger and Rookie contributor told Racked in 2014. "Shopping at thrift stores is now popular, which is the opposite of getting an expensive, labeled t-shirt. The days of Aéropostale being 'cool' are over."

The designs at Aéropostale did eventually move away from branded hoodies and tees, and more towards trendy teen attire, like crop tops and jean cut offs — but it was a little too late, as there was a momentous shift in retail: Fast fashion completely raised the stakes, and is cut into everyone's customer base, high and low. Teen shoppers who once frequented the "three A's" now have plenty more options. Zara, H&M, and Forever 21 now offer cheaper and trendier options — and plenty of them, too. Fast fashion brands pump out new styles weekly, which is perfect for young customers who want to update their wardrobes fast without dipping too much into their wallet.

Aéropostale also tried to gain young shoppers' attention by tapping YouTube star Bethany Mota for capsule collections.

Where Aéropostale was losing foot traffic amongst teen shoppers, it was nobly trying to make up for it in marketing. Aéropostale also tried to gain young shoppers' attention by tapping YouTube star Bethany Mota, who became famous through her shopping "haul" videos, for capsule collections starting back in December of 2013.

But the retailer also faced a challenge by relying on a sort-of celebrity for millennials. A modern-day media mogul, 20-year-old Mota might pique the interest of shoppers — but only momentarily. These days, teens are onto the next online personality just as fast as they swipe through Snapchat.

As Reuters noted in 2013, teens are a tricky segment of shoppers because, simply put, they're "fickle." Aéropostale is currently restructuring its business; part of its plan is to become a smaller entity. However, Neil Saunders, a retail analyst and CEO of research agency Conlumino, says downsizing might not be enough for the clothing giant.

"Longer term survival relies on reinventing the brand so that it is relevant to consumers and has traction with the younger audience," Saunder says. "That will require a great deal of effort and focus, especially in today's crowded and competitive marketplace."

If Aéropostale's style from the previous thirty years isn't working for them, why not just abandon it completely?

Reinvention is not such a farfetched idea. If Aéropostale's style from the previous thirty years isn't working for them, why not just abandon it completely? Such a move has served competitor Abercrombie & Fitch well. Amidst years of slumping sales of its own, Abercrombie went through a handful of changes: de-snobifying its branding messages, toning down the sexual insinuations in its photography, getting rid of logos, and debuting athleisure, the new cash cow of retail. Abercrombie even poached a J.Crew executive as its new creative director of marketing. The results? The look of Abercrombie & Fitch, as Business Insider noted, is completely unrecognizable — and it's finally appealing once again. The retailer's revenue saw growth in early March for the first time in three years.

With a product makeover, surely Aéropostale can stage some sort of successful comeback. Even with the upcoming shuttering of stores, the brand will still have plenty of stores, many of which occupy prime real estate (although the giant Times Square store, with accompanying billboard, is shuttering, sadly). Aéropostale also holds quite the audience on social media, with over 3 million Instagram followers and nearly 11 million likes on Facebook.

With fast fashion and e-commerce on the rise, retail today is more competitive than it's ever been. But we're seeing brands shapeshift to survive. There are digital companies like Birchbox, Warby Parker, and Bonobos, which opened stores in order to get ahead. But we're also seeing companies like Delia's and Trademark abandon stores completely to focus solely on e-commerce — a move that makes sense, considering that investment bank William Blair surveyed millennials recently and found that 44 percent of them are making fewer trips to the mall, according to the Chicago Tribune.

It's not too late for them, so long as they produce styles that shoppers actually want.

All this is to say that Aéropostale should take this time, post bankruptcy, to extend itself towards total transformation. It's not too late for them, so long as they produce styles that shoppers actually want. If it does choose to stay as an entity that operates both brick and mortar and e-commerce, it needs to turn its stores into a destination shoppers actually care about rather than having a store environment that, as CNN recently described it,"all too often resembles a yard sale."

For the last few years Aéropostale has been trapped in the past as a way to approach in the future. It's time it embraces the future if it wants to succeed.

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