Aeropostale mulls cost reduction as part of turnaround

01 May '14

3 min read

"The steps we are announcing build on our turnaround efforts from the past year," said Thomas P. Johnson, Chief Executive Officer of Aeropostale, Inc. "Through the restructuring of our P.S. from Aeropostale brand, and expansion of our expense savings program, we will be better positioned financially and have laid the groundwork for the future. In addition to these steps, our transaction with Sycamore Partners continues to proceed as planned, and will also provide additional runway to continue to implement our merchandising, marketing, and operational strategies designed to reposition the Aeropostale brand."

Mr. Johnson continued, "This day's actions reflect the very difficult but necessary decisions we have made to align our business with overall retail market trends. We thank all of the employees who have contributed to Aeropostale's turnaround plans for their diligence and dedication."

Global business advisory firm, AlixPartners LLP, served as advisor during the Company's strategic business review process. The Company continues to work with real estate consultants to optimize its real estate portfolio and will provide an update at a later date.

Reaffirms First Quarter 2014 Outlook

In line with prior guidance, the Company continues to expect first quarter 2014 operating losses in the range of $64 million to $68 million, which translates to a net loss in the range of $0.70 to $0.75 per diluted share. This outlook is provided on a non-GAAP basis because it excludes the impact of this day's announced strategic initiatives, as well as any expected consulting fees associated with these announcements. Due to uncertainties in estimating the absolute costs of these items, there is no readily accessible GAAP reconciliation available at this time.

Aeropostale

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