Home / Knowledge / News / Apparel/Garments / Aeropostale mulls cost reduction as part of turnaround
Aeropostale mulls cost reduction as part of turnaround
01
May '14
Aeropostale, Inc., a mall-based specialty retailer of casual apparel for young women and men, provided an update on its strategic initiatives and announced a comprehensive cost reduction program as part of the Company's on-going turnaround plans.  
 
Following a strategic business review, the Company has identified key initiatives it estimates will generate approximately $30 million to $35 million in annualized pre-tax savings, of which approximately $5 million to $10 million is expected to be achieved in fiscal 2014.
 
Plans to exit the P.S. from Aeropostale mall locations – Based on changing consumer patterns, particularly of the "mom" shopper, the Company has made the determination to close approximately 125 mall-based P.S. from Aeropostale stores by the end of fiscal 2014.  
 
Highlights: 
-Plans to Exit Mall-Based Locations of the P.S. from Aeropostale Brand to Focus on Faster Growing Distribution Channels
-Expands Company-Wide Expense Savings Program
-Expects to Generate Total of Approximately $30 Million to $35 Million in Annualized Cost Savings Beginning in 2015
-Reaffirms First Quarter 2014 Outlook
 
The Company plans to restructure the brand to focus on faster growing sales channels, including off-mall locations (including outlets), e-commerce, and international licensing.  The Company is also exploring other potential third party distribution channels.  By taking these steps, the Company expects to eliminate pre-tax losses of approximately $15 million that were generated in the mall-based business in fiscal 2013, excluding any impairment charges.
 
Streamlining and improvement of expense structure – Following a thorough review of the Company's current cost structure, Aeropostale has implemented a cost reduction plan that will target both direct and indirect spending across the organization.  This includes the Company's plans to reduce corporate headcount by approximately 100 positions to align with current business strategies, in addition to the workforce reductions from the Company's on-going store closure program.
 
The Company estimates that it will record pre-tax restructuring, asset impairment, and other charges of approximately $40 million to $65 million during fiscal 2014 related to these actions, of which approximately $25 million to $40 million are estimated to be cash expenses.


Must ReadView All

Textiles | On 30th May 2016

Uttarakhand to launch new textile parks

The Uttarakhand government is setting up three textile parks in the...

Apparel/Garments | On 30th May 2016

Youngone Corp to invest in Ethiopia’s textile sector

Youngone Corporation, a South Korea based textile and footwear...

Courtesy: Lakshmi Machine Works

Textiles | On 30th May 2016

LMW’s net sales up 5.41% in Q4 ended March 31

Lakshmi Machine Works (LMW) posted a rise of 5.41 per cent in net...

Interviews View All

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

How was your experience of a collaborative stall at ITMA 2015? Please...

Jurgen Gauger
Spreadshirt

How is the market for personalised prints on garment shaping up? What are...

Victor Chao
Esmetex

Could you describe the global market for sportswear? Which are the...

Kai Poehler
Voith Paper GmbH & Co. KG

<b><i>The glass mat industry is growing by five to eight per cent...

Eamonn Tighe
Nature Works LLC

<b><i>Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of ...

Paolo Ocleppo
Sandvik Hyperion

<b><i>Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
May 2016

F2F Magazine

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search