For quite some time now,
) has been struggling to strengthen its market position. This
mall-based specialty retailer of casual apparel has posted losses
for 4 straight quarters and has seen its stock crash about 45% so
far in the year. In an effort to uplift itself and focus on
avenues with growth potential, the company undertook certain
Aeropostale now plans to shutter 125 mall-based P.S. from
Aeropostale stores by the end of fiscal 2014. The rationale
behind the step is the changing consumer shopping pattern, habits
and preferences. In fiscal 2013, the company registered pre-tax
losses of approximately $15 million from its mall-based business.
As a result, it now intends to concentrate on off-mall locations,
e-commerce, international licensing and other third party
The company is also focusing on areas where it can contain
cost. As part of this endeavor, the company plans to lower its
workforce by approximately 100, which is in addition to the job
cut that will result on account of store closure.
Management hinted that the initiatives announced would help in
generating annualized pre-tax savings of approximately $30
million to $35 million, of which approximately $5 million to $10
million is expected to be attained in fiscal 2014. Aeropostale
also reiterated its first-quarter fiscal 2014 operating losses
between $64 million to $68 million, resulting in net loss of 70
cents to 75 cents a share.
Aeropostale, which holds a Zacks Rank #4 (Sell),
operates 854 Aeropostale outlets in 50 states and Puerto Rico, 77
Aeropostale stores in Canada and 150 P.S. from Aeropostale stores
in 31 states and Puerto Rico.
Other Stocks That Warrant a Look
Other better-ranked retail stocks that look promising and are
expected to continue with their upbeat performance include
Skechers USA Inc.
) holding a Zacks Rank #1 (Strong Buy), and
Foot Locker, Inc.
American Apparel, Inc.
) both carrying a Zacks Rank #2 (Buy).
AMER APPAREL (APP): Free Stock Analysis
AEROPOSTALE INC (ARO): Free Stock Analysis
FOOT LOCKER INC (FL): Free Stock Analysis
SKECHERS USA-A (SKX): Free Stock Analysis
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