- Simon Property, General Growth to keep 229 teen stores open
- Lender Sycamore says deal will result in payment of debt
A consortium led by Simon Property Group Inc. and General Growth Properties Inc. won an auction for the assets of Aeropostale Inc., with a plan to keep open at least 229 of the bankrupt teen retailer’s stores.
The bidding group will also keep the chain’s online business and licensing operation up and running, according to a statement late Thursday. The purchase price is $243.3 million plus assumption of certain debt, according to a court filing Friday.
A Manhattan bankruptcy judge must still approve the deal after reviewing the terms and any objections. A hearing on the matter has been set for Sept. 12.
“Aeropostale looks forward to closing the sale and emerging from bankruptcy with new ownership as a financially stronger company positioned to compete and succeed in an evolving retail landscape,” the New York-based company said in the statement.
The chain filed for bankruptcy in May, succumbing to competition from big-box stores, online merchants and “fast fashion” rivals. The company also accused lead lender Sycamore Partners of pushing it into Chapter 11 to buy it on the cheap. The bankruptcy judge rejected that claim and allowed the private equity firm to take part in the bidding.
“We are pleased with the outcome of the Aeropostale Inc. bankruptcy auction, which will result in the repayment of our debt while enabling the company to keep open more than 200 stores, preserve thousands of jobs and continue to serve customers,” Sycamore said through a spokesman.
Creditors will have a chance to object to the sale before the judge decides whether it can close. Should the deal fail, affiliates of Sycamore would be declared the auction winners.
The case is In re Aeropostale Inc., 16-11275, U.S. Bankruptcy Court, Southern District of New York (Manhattan).