Aeropostale plans to turn the business around through restructuring

Aeropostale plans to turn the business around through restructuring

Aeropostale has won approval of US$160m in financing that may help the bankrupt US fashion retailer stay in business and complete its restructuring.

The US Bankruptcy Court for the Southern District of New York on Friday (10 June) gave final approval for Aeropostale to access the loan, provided by Crystal Financial. This was despite the objections of some of the company's other lenders who argued in court filings that Aeropostale's plans were doomed. 

CEO Julian Geiger said: "We are pleased that the court has approved our DIP financing. We are looking forward to emerging from this process as a leaner, more efficient business and firmly believe that we will be well-positioned to compete and succeed in today's retail environment."

Aeropostale filed for bankruptcy protection early last month, with plans to initially close around 154 stores in the US and Canada. A month earlier the company had been delisted by the New York Stock Exchange due to its abnormally low trading price.

The company now says it intends to emerge from bankruptcy within six months as a standalone enterprise with a smaller store base, increased operating efficiencies and reduced selling, general and administrative (SG&A) expenses.

Aeropostale to close 154 stores amid bankruptucy