Aéropostale, the Bernie Sanders of teen retail, is refusing to give up.
The struggling specialty apparel chain, which finally filed for Chapter 11 bankruptcy protection in May after more than three years of sliding sales, is duking it out in court with its main moneylender, an affiliate of Sycamore Partners.
According to the Wall Street Journal, Sycamore wants Aéropostale to make up its mind and pick a lead bankruptcy auction bidder by July 1 so buyers—liquidators, mainly—can snap up product in time for back-to-school season.
But the retailer still thinks it can turn around its business, insisting that BTS could bring in the cash it needs to reorganize or attract the interest of a buyer that will keep its stores open.
When Aéropostale filed for Chapter 11, it was with the intention of emerging in six months with a right-sized store footprint, improved efficiencies and fewer expenses, or with a new owner. However, Sycamore has called the plan “illusory,” with “no realistic chance of success,” and wants the retailer to call it quits.
It’s not the first time the two have butted heads. Aéropostale recently settled an argument with MGF Sourcing, an apparel manufacturer and supply chain management company owned by Sycamore, after the retailer alleged its supplier had breached their 10-year contract by suddenly demanding payment up front instead of in 60 days’ time.
In other news, a hearing is scheduled to take place Thursday at bankruptcy court in New York to consider $160 million in debtor-in-possession financing. Aéropostale’s plans for reorganization and for liquidation are due in July.
Since starting life in the 1980s as Compagnie Generale Aéropostale, a private label at Macy’s, Aéropostale had some 800 locations by the time it filed for Chapter 11 last month. But in the last three years the once-mighty teen retailer fell hard and fast, going from a pre-tax profit of $59 million in 2013 to a loss of $132 million in 2016.