A recent post here discussed the Chapter 11 bankruptcy filing being pursued by California-based clothing retailer Pacific Sunwear. Now, reports indicate that yet another clothing retailer geared toward the tastes of teens and young adults is making a similar move in a bankruptcy filing.
Like many companies that opt for a Chapter 11 business bankruptcy, it appears that this latest company, Aeropostale, will attempt to make a turnaround and remain in operation after the bankruptcy filing process is complete. However, the overall company structure is likely to look significantly different. The reports indicated that the company will close all of its retail locations in Canada, and 113 retail locations throughout America. The locations are mainly based in shopping malls.
Our Escondido readers may recall that numerous companies that have previously based their operations in shopping malls are having trouble attracting consumers to these locations. More often these days consumers are relying on the Internet for their shopping needs. Changing tastes in clothing may also be a contributing factor to Aeropostale's changing financial status, as these trends are not easy to keep up with.
Filing for Chapter 11 bankruptcy can be a shrewd move for the leaders of a company who see a path forward and a possibility for a return to profitability. Debt reorganization can be accomplished and streamlining company operations can result in a more focused business plan. Escondido business owners who see the benefits of filing for Chapter 11 bankruptcy may want to get more information about how such a move could impact their own finances.
Source: Yahoo!, "Teen Apparel Chain Aeropostale Files for Bankruptcy Protection," May 4, 2016