Aeropostale booted off stock exchange

Retailer faces low sales as teens turn to second-hand and fast-fashion shops

Toronto teenagers used to line up for the privilege of buying clothes at Aeropostale. Not any more and perhaps not again, as the once high-flying retail chain teeters on the brink of bankruptcy, booted off the New York Stock Exchange on Friday after sinking to penny-stock status.

Shares in Aeropostale, which used to trade above $30 (U.S.), have not hit $1 since September.

“There’s a couple of macro-trends that are affecting all teen retailers,” said Kit Yarrow, consumer psychologist and author of Decoding the New Consumer Mind: How and Why We Shop and Buy.

“Teens are really looking at clothing differently. It’s not what defines them anymore. That role has shifted to technology, and technology costs money,” Yarrow said. “That’s left less money for fashion. I think all teen retailers are kind of struggling with that.”

Other wobbling teen fashion retailers include American Apparel, Gap Inc., Abercrombie & Fitch and American Eagle Outfitters.

Aeropostale is said to be considering bankruptcy protection as it searches for a buyer or a loan and a restructuring plan.

It has closed more than 100 stores since last year; at the end of January 2015, the chain had 860 stores, including 61 in Canada. According to recent SEC filings, the chain is down to 744 stores, with 41in Canada.

The company operates in the U.S. and Canada, and licences the brand in other countries.

Aeropostale has been struggling with falling sales for years as teens flock to fast-fashion retailers such as Sweden’s H&M and Forever 21.

But it’s not just the fast-fashion retailers giving teen apparel-makers a run for their money, Yarrow points out. Teenagers today are shopping at second-hand stores.

“I think another really big shift in teenagers today is this sort of notion that they should downplay their looks a little bit. Now, this is a lie — there is no way that appearances aren’t even more important than they were before,” said Yarrow.

“But for this generation of kids, investing lots of money in things to wear is looked at as a little gauche. You’re supposed to look like you don’t care as much.”

Retailers who are succeeding, including Canada’s Aritzia, are the ones that innovate, said Phil Lichtsztral, retail consultant, Richter.

“Millennials are less brand-loyal today and are more brand-agnostic,” he said.

“It’s just a real jungle of people fighting each other for the same consumers,” he said of the sector.

“I guess consumers have voted with their wallets.” With files from Star wires