After considering different strategies, teen clothing retailer Aeropostale Inc seems to be giving up, with sources in the know of affairs within the company claiming that the company may file for bankruptcy this very month and reorganise under Chapter 11.
Also Read – Aéropostale posts drop in sales in Q4FY16
The New York-based retailer, which has been struggling for over a month due to falling sales, had been mulling over restructuring its business and even a possible sale.
With this news doing the rounds, shares dropped 27.7 percent to a record low of 15.1 cents in afternoon trading, after which shares were completely halted until further news regarding the possible bankruptcy filing.
Also read – Aéropostale mulls change in strategy, possible sale
The American retailer is considering taking a loan to fund its operations during the bankruptcy process, reports said.
According to the New York Stock Exchange, it had suspended trading the company’s shares and delisted the company.
Aeropostale has reportedly confirmed on Friday that it had received a written notice on the stock exchange suspending trading effective immediately, noting that it “does not intend to appeal the delisting determination”.
The company had in March stated that it was exploring other strategies, including a possible sale, on account of citing a dispute with MGF Sourcing US, which is an affiliate of private-equity firm Sycamore Partners. Sycamore had back in 2014 pumped $150 million into Aeropostale, and previously owned an 8 per cent stake.
