Tags: Aeropostale | Loss | Forecast | Investors

Aeropostale's Loss Forecast Jolts Investors

Thursday, 13 Mar 2014 06:00 PM

Shares of Aeropostale Inc., a retail chain that sells teen and children's apparel in North America, tumbled as much as 14 percent in late trading Thursday after the company forecast a steeper loss and said it agreed to borrow $150 million.

The first-quarter loss will be 70 cents to 75 cents a share, New York-based Aeropostale said in a statement. Analysts had projected a loss of 17 cents on average, according to data compiled by Bloomberg. The company also said it has entered a strategic partnership with Sycamore Partners, which will provide the $150 million loan.

Aeropostale Chief Executive Officer Tom Johnson is trying to turn around the struggling retailer with updated fashions and a plan to close as many as 40 underperforming stores this year. The company has lost money for five straight quarters. Meanwhile, Crescendo Partners has been pressing Aeropostale’s management, sending a letter in November demanding that the retailer find a buyer.

“We are moving aggressively and taking swift actions across all areas of our business that we expect will improve our operational and financial performance,” Johnson said in the statement. The financing agreement “provides us with the flexibility to continue executing on our strategies designed to reposition the Aeropostale brand.”

Aeropostale shares fell as low as $6.25 in late trading after the earnings report was released. At about 6 p.m. in New York, the shares were down 12 percent at $6.40. The shares had already dropped 20 percent this year through the close of trading Thursday, compared to decline of less than 1 percent for the Standard & Poor’s 500 Index.

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Shares of Aeropostale Inc., a retail chain that sells teen and children's apparel in North America, tumbled as much as 14 percent in late trading Thursday after the company forecast a steeper loss and said it agreed to borrow $150 million.
Aeropostale,Loss,Forecast,Investors
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2014-00-13
Thursday, 13 Mar 2014 06:00 PM
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