- Retailer relying on FTI Consulting and law firm Weil
- Aeropostale also plans to delay filing its annual report
Aeropostale Inc. has brought on additional legal and business advisers as the beleaguered teen-clothing chain considers a possible restructuring or sale, according to people familiar with the matter.
The retailer is relying on law firm Weil Gotshal & Manges LLP and financial adviser FTI Consulting Inc., said the people, who asked not to be identified because the deliberations aren’t public. Aeropostale said last month that it was also working with Stifel Financial Corp. to explore strategic alternatives, including the possibility of selling the chain or restructuring it.
Aeropostale is seeking ways to fix the company after years of tumbling sales and red ink, including a wider-than-expected loss in the fourth quarter. The New York-based retailer has suffered from changing tastes among teen shoppers and a shift of apparel spending online. Aeropostale brought back longtime Chief Executive Officer Julian Geiger in August 2014 to help turn things around, but it has continued to struggle.
A feud with lender Sycamore Partners over Aeropostale’s apparel supply hasn’t helped. In March, the chain said Sycamore’s MGF Sourcing unit was holding up orders and violating a supplier agreement, putting the retailer at risk of losing millions of dollars. Sycamore says it hasn’t breached the contract. Aeropostale has shifted orders to Li & Fung Ltd. to cope with the situation, people familiar with the matter told Bloomberg last week.
Aeropostale has turned to Weil and FTI to handle various tasks over the years. The retailer has enlisted FTI’s corporate-communications arm, and Weil represented the retailer during earlier dealings with Sycamore. FTI also previously advised companies such as the now-bankrupt Sports Authority Inc. and Pacific Sunwear of California Inc. on restructuring.
Aeropostale said on Friday that the sourcing dispute and its strategic review will delay the filing of its annual report.
“Due to the considerable time and attention management is devoting to evaluating the implications of these matters, addressing concerns regarding its business operations and the continuing consideration of strategic and financial alternatives, the company has been unable to complete the preparation of its annual report,” Aeropostale said in a filing.