Aéropostale flies high in the world of youth fashion. The retailer operates more than 1,000 mostly mall-based stores under the Aéropostale and P.S. from Aéropostale (for kids) banners in 50 US states, Puerto Rico, and Canada. Aéropostale stocks the usual teen outerwear (jeans, T-shirts, accessories), mostly under the Aéropostale and Aéro names. It designs and sources its own merchandise so that it can quickly respond to trends. The Aéropostale name originated from a 1920s airmail firm, Compagnie Generale Aéropostale. The brand was created by R.H. Macy & Co. as a private label in the 1980s and later became a specialty store concept.
In addition to its main chain Aéropostale stores, the retailer operates P.S. from Aéropostale, a casual-apparel chain for kids between the ages of 4 and 12. P.S. from Aéropostale operates more than 100 stores in some 20 US states. The company also operates the GoJane.com website, based in Ontario, California.
In 2014 the company operated 949 Aéropostale stores across the US, Puerto Rico, and Canada; and 151 P.S. from Aéropostale locations in the US and Puerto Rico.
Aéropostale rang up 94% of its $2.4 billion in fiscal 2013 (ended January) sales in the US. The remainder came from Canada, where it operates about 80 shops nationwide. Beyond North America, licensees operate about 55 Aéropostale and P.S. from Aéropostale shops in Europe, the Middle East, and Latin America. It launched its P.S. brand in Mexico in mid-2014.
Sales and Marketing
The company markets its wares in stores via window displays and within its store locations. To drive customers to its stores, Aéropostale conducts marketing pushes (in magazines, online, and on the radio) during high-selling periods.
Historically a high flier on the youth fashion scene, Aéropostale's sales and profits have lacked lift lately. In fiscal 2014 (ended January) sale fell 12% to $2.1 billion, versus $2.4 billion in 2013, primarily due to a decrease in comparable store sales. Fiscal 2013 also had an extra selling week, which led to a slight boost for that period.
After making a profit of $34.9 million in fiscal 2013, the company ended up posting a loss of $141.8 million in 2014. Factors contributing to the loss were the year's decline in revenue and an increase in interest expenses. Cash flow from operations also took a dive in 2014, with an outflow of $38.4 million reported (versus an inflow of $144.8 million in 2013); net losses led drove the outflow.
The retailer is looking to its kids brand, P.S. from Aéropostale, e-commerce, and international licensing to drive sales growth. The company is expanding into Mexico through a licensing agreement with Distribuidora Liverpool. Aeropostale began opening in-store shops in Liverpool department stores and rolling out standalone stores across Mexico in summer 2013. In 2014 the company introduced its two store brands to Chile through a licensing agreement with Sociedad Comercial Group Yes; it will begin opening store locations in Chile in 2015. Aéropostale is also focused on expanding its fast-growing e-commerce business with new product categories. To this end, the company bought online women's fashion footwear and apparel retailer GoJane.com in late 2012.
To spur sales, Aéropostale is repositioning the brand and working to improve its merchandise and marketing. (It's interesting to note that the chain enjoyed double-digit sales increases during the deep recession, while pricier retailers, notably rival Abercrombie & Fitch, suffered. Now with the economy improving, value-priced Aéropostale is struggling a bit.) Still, the company plans to continue to open new stores in fiscal 2014: about 14 Aéropostale locations and approximately 60 P.S. from Aéropostale shops. Turkey is also on the company's plan for expansion. Indeed, Aéroposale recently signed a licensing agreement with FiBA Group to open some 30 stores across Turkey by 2016.
In 2014 the company announced plans to shutter 125 mall-based P.S. from Aéropostale stores by the end of fiscal 2015 (ends January). It cited changing consumer habits for its decision to close the mall-based stores and focus instead on faster-growing venues, such as online sales, outlet stores, and licensing deals. Extending its retail reach from 14- to 17-year-olds to younger kids, the company launched P.S. from Aéropostale to target elementary schoolers. The P.S. concept offers casual apparel and accessories, and competes with other brands aimed at kids, including crewcuts (by J. Crew) and abercrombie (Abercrombie & Fitch). Retailers establish these kid-oriented feeder brands with the hope that when they grow up they will shop at the teen stores.