Private-equity investor Versa Capital is understood to be considering making a bid for struggling teen apparel retailer Aeropostale.

According to a number of reports, Versa has been in discussions with Aeropostale about becoming a stalking horse bidder for the company at its upcoming auction. The teen retailer filed for bankruptcy in May and is planning to sell its assets at an upcoming auction rather than attempt to reorganise on a standalone basis. 

Aeropostale to close 154 stores amid bankruptucy

Aeropostale won court approval on Monday (8 August) to pay expenses the Versa affiliate has incurred preparing the bid, clearing the way for the two companies to reach a potential deal. Competing bids are due by 18 August and the auction is set to be held on 22 August. 

Philadelphia-based Versa is experienced in the world of teen retail, last year acquiring the Wet Seal chain out of bankruptcy for US$7.5m in cash. 

Tensions between Aeropostale and private-equity firm Sycamore Partners, which backs Aeropostale lender Aero Investors, have simmered throughout the retailer's bankruptcy case. The two blame each other for Aeropostale's financial difficulties.

In June, Aeropostale won approval of $160m in financing to potentially help the US fashion retailer stay in business and complete its restructuring. However, it made a decision shortly after to sell its assets as part of an auction process. 

Bankrupt Aeropostale handed US$160m lifeline

Last month, the company filed litigation against Sycamore and its affiliates, saying it continues to believe they engaged in "significant bad acts" that deliberately forced the chain into bankruptcy.

Aeropostale sues creditor over "significant bad acts"