Aéropostale operates more than 850 mostly mall-based stores under the Aéropostale and P.S. from Aéropostale (for kids) banners in 50 US states, Puerto Rico, and Canada. It stocks the usual teen outerwear (jeans, T-shirts, accessories), mostly under the Aéropostale and Aéro names. The retailer designs and sources its own merchandise so that it can quickly respond to trends, but has been struggling in a competitive environment in the aftermath of the US recession. 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 Aéropostale chain, 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 about two dozen stores in a dozen US states. The company also operates the GoJane.com website, based in Ontario, California.
Aéropostale rang up 95% of its revenue in fiscal 2015 (ended January) in the US. The remainder came from Canada, where it operates about 60 shops nationwide. Beyond North America, licensees operate about 240 Aéropostale and P.S. from Aéropostale shops in Europe, the Middle East, and Latin America.
Historically a high flier on the youth fashion scene, Aéropostale has seen sales, net income, and cash from operations drop significantly since fiscal 2013 as it struggles with declines in mall traffic, the changing tastes of teens, and intense competition (from the likes of American Eagle and Abercrombie & Fitch, among others). It reported fiscal 2015 revenue of $1.8 billion, down 12% from the prior year, as the company closed nearly 250 stores as part of its turnaround efforts. Aéropostale has recorded a net loss for the past two years, with a 2015 loss of about $206 million. Unsurprisingly, cash from operations has followed the same trend, dropping to a negative $56 million that year from a negative $38 million the year before.
The retailer is looking to off-mall locations, e-commerce, and international licensing to drive sales growth as it shutters a substantial number of its traditional mall-based locations. Aéropostale saw a lot of activity in its international licensing segment in fiscal 2015 with new markets Chile, Malaysia, and Mexico; Ireland is among the markets scheduled for fiscal 2016. Turkey is also on the company's plan for expansion, and it has plans for licensed locations in Thailand and Egypt within the next five years.
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, suffered. Now with the economy improving, value-priced Aéropostale is struggling a bit.)