Premium Essay

Aeropostale

In: Business and Management

Submitted By pithor
Words 2517
Pages 11
Case Study Analysis 1: Aeropostale, Period 2010 – 2012
November 4, 2013

Executive Summary
This financial analysis report examines our company Aeropostale and a few of our close competitors within the teen retail industry in order to evaluate company performance and financial health. The 3 year financial analysis covers GAP (GPS), Abercrombie and Fitch (ANF), Ralph Lauren Polo (RL) and Aeropostale from income statements / balance sheets with resultant calculations on the subjects of revenue, gross profit, return on equity, liquidity, financial leverage and market valuation from year 2010 to year 2012.

There are many areas that require improvement as financial calculations have revealed negative company health. Improvements must come from the product itself with improved design and marketing.

Background
With approximately 980 stores throughout the United States and Canada, Aeropostale is a proud with its designing, marketing and retailing of teen casual apparel and accessories. We have been a shopping mall based specialty retailer of casual apparel for young men and women with control over our proprietary brands for sourcing, marketing and selling our own merchandise.

As of 2012, media analysts have indicated that Aeropostale stores are smaller in size compared to Gap’s stores, and generate significantly higher revenue per square feet. Moreover, before cotton prices climbed in 2011, Aeropostale locations generated about $150 in EBITDA per square feet compared to Gap’s $90 ^1
However, the Wall Street Journal (Market Watch ) on Aug. 16, 2012, presented that Aeropostale profit fell 98% and offers a weak outlook. Fiscal second-quarter earnings sank as the youth-focused apparel retailer's expenses increased and as a one-time gain boosted the company's year-ago results. Analysts have noted missed fashion trends weighed on Aeropostale, which has primarily…...

Similar Documents

Premium Essay

Aeropostale Inc. Company Analysis: Overview, History and Current Structure

...Aeropostale Inc. Company Analysis: Overview, History and Current Structure Davenport University Aeropostale Inc. Company Analysis: Overview, History and Current Structure Aeropostale Incorporated is a “mall-based” retail store chain that caters to 14 to 17 year old young women and men who are interested in “casual apparel and accessories (Aeropostale Inc. Corporate, n.d.). According to Aeropostale website, a Privacy Policy with Canada, states that Aeropostale Inc. has a subsidiary called “P.S. from Aeropostale” that caters to the 7-12 year olds (Aeropostale Inc., 2012, April). Mergent Online disclosed that Aeropostale Inc. “sells a range of apparel, including graphic t-shirts, tops, bottoms, sweaters, jeans, outerwear and accessories” (Mergent, 2012). Mergent’s Online Business Summary of Aeropostale Inc., reports that, “as of Jan 29 2011, [Aeropostale Inc.] Co. operated 965 Aeropostale stores, consisting of 906 stores in 49 states and Puerto Rico, 59 stores in Canada, as well as 47 P.S. from Aeropostale stores in 13 states (Mergent, 2012). Aeropostale was started for Macy’s department store under a private label in 1982 (Shop Aeropostale, n.d.). The name Aeropostale, according to Aeropostale corporate website, dates back to the 1920’s: “Compagnie Generale Aéropostale, a pioneer airmail company, was the first ever to fly between France, South Africa, and South America”, this is who the......

Words: 1221 - Pages: 5

Premium Essay

Financial Statement Analysis

...TABLE OF CONTENTS INTRODUCTION AEROPOSTALE, INC. VS. ABERCROMBIE AND FITCH CO. PERFORMANCE DURING RECESSION AEROPOSTALE EXPANDING E-COMMERCE SALES BACK TO SCHOOL SEASON INCREASES IN COMMODITY PRICES ANALYSIS PROFITABILITY GROSS PROFIT MARGIN NET PROFIT MARGIN INVENTORY TURNOVER RETURN ON CAPITAL EMPLOYED (ROCE) LIQUIDITY CURRENT RATIO ACID TEST OR QUICK RATIO DEBTOR DAYS CREDITOR DAYS SOLVENCY GEARING VALUATION EARNINGS PER SHARE (EPS) CONCLUSION BIBLIOGRAPHY APPENDICES LIST OF TABLES TABLE 1: FINANCIAL PERFORMANCE INDICATORS ON PROFITABILITY TABLE 2: FINANCIAL PERFORMANCE INDICATORS ON LIQUIDITY TABLE 3: FINANCIAL PERFORMANCE INDICATORS ON SOLVENCY TABLE 4: FINANCIAL PERFORMANCE INDICATORS ON VALUATION 0364693/2 INTRODUCTION Aeropostale, Inc. (ARO) which is frequently referred to as Aeropostale by their consumers is a U.S. based clothing retailer that sells casual clothing with approximately 900 plus stores located in the United States, Canada, Puerto Rico and the United Arab Emirates. ARO stores are primarily based in shopping malls and sells fashion apparel inclusive of printed tees and polos, shirts, jeans, footwear, swimwear, underwear, fleece and accessories. ARO’s teen brand has been extremely successful and as a result of this, they were driven to launch a new brand, P.S. from Aeropostale which sells children’s clothing. AEROPOSTALE, INC. VS. ABERCROMBIE AND FITCH CO. To sell their own brand of apparel and accessories, ARO targets a young......

Words: 7231 - Pages: 29

Premium Essay

Aero

...at the end of the seasonal period. Consideration to be hired as part of the store’s core staffing will be given to associates based on performance, availability and the needs of the business. Today’s Date Aéropostale is an equal opportunity employer (First) (Middle) Have you ever worked or attended school under another name that we need to know to verify your records? If yes, name: Yes No Home Phone Number Name (Last) Permanent Address (Number, Street, City, State & Zip) Temporary Mailing Address Social Security Number Business or Temporary Phone Position Desired List names of friends and relatives now employed by Aéropostale Schedule Preferred Full Time (7, 7 1/2 or More Hours Daily - 5 Days) Part Time (Days / Evenings / Weekends) Are you 18 years of age or older? Yes No What days are you NOT available for work? Currently employed? List your interests, hobbies, special skills Full Time Part Time Not Employed Foreign language (s) spoken fluently which would be helpful in position sought List names of all organizations of which you are a member (exclude any organization which would indicate the following: race, color, creed, ancestry, national origin, religion, sex, or marital status) Have you ever been employed by Aéropostale? If yes, under what name were you employed? Store location? Dates employed? From: To: Yes No PREVIOUS EMPLOYMENT List in order of employment starting with your present employment. Please......

Words: 1244 - Pages: 5

Premium Essay

Financial Analysis on Twitter

...launch and growth of the Justice brand. Same store sales grew 4% company-wide in 2007, but this was fueled by 21% growth at Justice stores while sales at The Limited Too remained flat (0% growth).[4] The company announced in August '08 that in response to slumping sales at these stores, it will discontinue the Limited Too brand, converting 560 stores to the Justice brand and closing 26 others.[5] Despite nearly doubling its total revenue from $599 million in 2003 to $1.0 billion in 2007, Tween Brands remains a smaller player in the specialty youth apparel retail market.[6] The company must continue growing to match the performance of competitors like Abercrombie & Fitch ($3.75 billion of sales in 2007), American Eagle ($3.0 billion), and Aeropostale ($1.6 billion).[7][8][9] Business Overview Contents 1 Business Overview 2 Trends and Forces 2.1 International Expansion in Middle East and Europe 2.2 Channeling Growth from E-commerce Operations 2.3 Second Half Strength: Back-to-School and Holiday Shopping 3 Competition 4 References Limited Too was launched as an in-store department of The Limited, a subsidiary of Limited Brands. Limited Too later grew into its own retail store chain, then in 1999 Tween Brands was spun-off from Limited Brands (LTD). In early calendar-year 2004 (end of FY03), Tween Brands launched Justice, ending FY04 with 35 Justice stores operating in the United States.[10] Both stores have grown significantly since launch, as TWB operated 586 Limited Too and......

Words: 1878 - Pages: 8

Premium Essay

Retail Marketing Case Study

...young adult clothing market. A few of their main competitors are Aeropostale, The Gap, and Express. Each one of them works in their own unique way in order to differentiate themselves from the competition and gain an advantage. Aeropostale targets the age group between 14 and 17 years of age and relies very heavily on sales and promotions in order to attract customers. The Gap differentiates itself by marketing itself often and extremely well as a unique, special occasion brand. Also, according to an outside research study, the Gap is near the very top of companies that effectively meet its customers’ needs. Express, on the other hand, has differentiated itself by creating a strong brand name. Express customers are extremely loyal to the brand and see their clothes as a sexy, daring apparel choice. In constructing a product positioning map for the five companies mentioned previously the four ends would be low price, high price, low quality, and high quality. In the product positioning map Express would fall into the high price/high quality quadrant, The Gap would fall into the high price/high quality quadrant with its price and quality just a tad lower than Express, Abercrombie would fall in the high price/high quality quadrant with its price and quality slightly less than The Gap, American Eagle would fall into the low price/high quality quadrant with its quality about equal to the previous three, and finally Aeropostale would fall into the low price/low quality section of......

Words: 1230 - Pages: 5

Free Essay

Section 2.05 Flvs

...styles that will draw the teen into buying that select style because it was specifically made for them. For instance, on the Forever21 website (clothing store that sells teen clothes) they have sections such as “trending now”, “new arrivals”, and a summer collection “sunny days”. Also if you were to look at clothing store websites that sell clothes directed towards teens such as “Aeropostale, Hollister, Hot Topic, and/or Justice”, you would see that they also have specified sections for individuals such as the one’s shown on Forever 21’s website. When looking at the majority of the mainstream clothing stores you will see that they sell their clothes to a wide range of individuals, no matter what the race shall be. They do have individual sections that are designated to “men” and/or “women”, but they do not specify on race nor target a certain race. They intend on their clothing products to be bought by all not to be bought by those on an specific ethical stance. Title, URL, and Date of Access Central Idea · Forever 21, http://www.forever21.com/, 6/22/2015 teen clothing store · Aeropostale, http://www.aeropostale.com/shop/index.jsp?categoryId=3534619, teen clothing store 6/22/2015 · Hollister, http://www.hollisterco.com/shop/us, 6/22/2015 teen clothing store · Hot Topic, http://www.hottopic.com/hottopic/Homepage.jsp, 6/22/2015 teen clothing store · Justice, http://www.shopjustice.com/, 6/22/2015 teen clothing store Thesis Statement:......

Words: 362 - Pages: 2

Free Essay

Pacsun Valuation Paper

...peer group are comparable to Pacific Sunwear, despite differences in their financial performance and/or business model and size. Based on the concluded price of $2.43, the stock appears to be slightly undervalued, and it should be noted that the stock price has increased to $2.76 since the analysis was completed. I chose a “Hold” recommendation as the concluded price is close to the current stock price, and the stock is very risky. The price going forward will likely be contingent on the company’s ability to leverage cost reductions, store closures, and a new marketing strategy into increased profitability and improved financial condition. Relative Valuation: For the relative valuation, I used the peer group I selected, consisting of Aeropostale, American Eagle Outfitters, Tilly’s, Wet Seal, and Zumiez, and used the price/book ratio to estimate a price range. The average price/book ratio yielded a price of $2.69 with a range of $2.04 - $3.06 based on the min and max price/book ratios. Based on the relative valuation, the stock appears to be overvalued. Regression Analysis: For the regression analysis, I used the price/book ratio as my dependent variable with beta, sales growth, total debt/equity, and number of stores as the independent variables. This yielded a price/book ratio of 2.64 and implied price of $2.50. I also ran a regression using price/sales as the dependent variable and the same dependent variables, which yielded an implied price of $2.10. The average of......

Words: 8041 - Pages: 33

Premium Essay

Decision Making in Paradise Part Ii

...the population is young and probably seeking basic education as well as knowledge of the world that surrounding them. The local government appears to be paying attention in humanizing the quality of life for its citizens and the corporation can help in this objective. That objective is obtainable with appropriate solution implement over a period may perhaps make sense to the stakeholders concerned, the company major assignment and requires extensive problem classification to rebuilding Kava to fulfill with safety and principles that influence the quality of life for all Islands. Decision-making technique The management team for Aeropostale has a mission to provide the Island with quality clothing and jobs opportunities that will inject financial gain for the community of Kava. There are five steps to making effective decisions that Aeropostale will use to find solution, these are create a constrictive environment, People of Kava will rebuild through the generous donation of caring individuals as well as the help from the large organization. Decision-making can broadly categorizes as define the situation, generate alternatives, Information gathering, selection, Action taking although all this steps are important for decision-making but the most influence and impart that help to proposed a solution is to defind the situation that will help the alternative to gathering the information and take action. Situation is the vital to have a good understanding and be very clear......

Words: 823 - Pages: 4

Premium Essay

Student

...threats within the marketplace to Hollister Co.’s current operations and profits. Competition from other retailers, scandals within Hollister Co.’s business practices, and socioeconomic factors may all affect the success of the brand. 1. Competition: Standing Out in a Saturated Market The stores in competition with Hollister Co. include American Eagle Outfitters, Aeropostale, Zumiez, and PacSun (Hunter, 2008). Aeropostale has proven to be tough competition for Hollister Co. due to the fact that they offer very similar merchandise, but at a lower price point (Aeropostale, 2009). Polo shirts from Aeropostale typically cost between $20-$30 and often go on sale, while Hollister Co. polos can cost from $30-$40 (Aeropostale, 2009). Jeans from Hollister Co. will cost you $50-$60, while similar styles can be found at Aeropostale for $40-$50 (Aeropostale.com, 2009). In order to differentiate themselves from competitors like Aeropostale, Hollister Co. should keep a tight grasp on their target customers by, “producing truly compelling merchandise and providing superior environments for trying them on, as Aeropostale and Coach do” (Karonis and Riley, 2009). Because Hollister Co. lacks price as being one of its stronger competitive advantages, it needs to specialize in another aspect. American Eagle Outfitters is commonly compared with Hollister Co. mostly because of its use of an eagle logo which closely resembles Hollister Co.’s seagull (McDevitt, 2009). Some......

Words: 6603 - Pages: 27

Premium Essay

Abercrombie

...ABERCROMBIE AND FITCH OVERVIEW Abercrombie and Fitch Co. (ANF) is a specialty retailer that operates stores selling casual apparel, sportswear apparel, personal care products and accessories for men, women and kids under the Abercrombie and Fitch, Abercrombie, Hollister and RUEHL brands. With a customer base that is primarily under thirty years old, ANF was established in 1892 by David Abercrombie and Ezra Fitch. ANF operates in the US, the UK and Canada and is headquartered I New Albany, Ohio with over 20,000 employees. As a “near to luxury” retailer, ANF operates in an apparel industry which straddles high to low end merchandise. Its’ main competitors include : American Eagle, Aeropostale, Gap and J- Crew. Their focus on capturing a young market has created a rivalry, which forces them to be innovative and creative in delivering fashionable mechandise. As a result, their competitive strategy involves not only marketing their products through stores, but via catalogs and e- commerce activites. SWOT ANALYSIS, ABERCROMBIE AND FITCH A scan of the internal and external environment is essential in any firm’s strategic planning process. A SWOT analysis defines the internal and external environmental issues with which a firm must address in its strategic planning process. This type of analysis specifies the internal and external factors that are favourable and or unfavourable to the firm achieving its business objectives. It guides the firm in matching its resources and......

Words: 668 - Pages: 3

Premium Essay

Inf 336 Final

...2010). The simple difference between the public and private is public are service providers that are not so exclusive but have strict regulations. Private organizations have companies with stocks that are publicly traded but they have fewer constraints. With public organizations, it includes education, health, a host of agencies, and utilities. “Many utility companies, seeking ways to cut costs in an increasingly competitive environment while improving productivity and customer service, have started looking to the supply chain for efficiencies” (Paulson, S. L. 2007). Purchase and supply management is not just for utilities. It’s used by many organizations that deal with heavy volumes of supplies. Aeropostale is one of the organizations that utilize supply management. “Aeropostale has selected NGC's supply chain management software as the company's international supply chain management system” (Business Wire 2011). Purchasing and supply management has its benefits that can make it important to an organization. Purchase and supply management can help cut possible cost and also wire out all effeciencies in addition to other factors. “The PSM function has evolved from being routine and mechanical to a function that can deliver true competitive advantage” (Schoenherr, T., Modi, S. B., Benton, W. C., Carter, C. R., Choi, T. Y., Larson, P. D., & ... Wagner, S. M. 2012). Having this edge can make a huge difference in how the company will grow in the years to come. With the......

Words: 2594 - Pages: 11

Premium Essay

The View of Life

...proper measures for patient safety and comfort, Patience and excellent personal hygiene
, Able to give detailed and accurate written reports to agency, Ability to read and follow written instructions and care documents, Hands-on experience in submission of clinical records, visit notes and every day time summaries, Excellent patient care skills, Professional appearance and ability to comply with agency dress code
, Proven ability to communicate clinical information in an accurate and friendly way
, Excellent customer service skills
, Ability to communicate well with others, Good organization and communication skills
, Excellent verbal and written communication skills, Computer: Skilled in MS Office Suite Cashier/Floor Worker Aeropostale (Prime Outlets) Williamsburg VA 05/12 – 12/12 Cashing out customers Assisted them with the sales Stocking Assisted with unloading the truck Helped count inventory Cashier/Customer service Big Lots Williamsburg VA 02/11 – 10/11 Cashing out customers Making sure everything was neat and in order Assisting customers with sales Various Job Assignments A.C.T (Achieving Careers Today) Program Williamsburg VA 10/08 – 11/10 Office Assistant with James City County Human Services Prepared enrollment packets for the head start students Answered phones Assisted the teachers with classroom activities Cleaned offices Bev Cares Home Care......

Words: 296 - Pages: 2

Premium Essay

Birthday

...opportunities for commercial advantages and delegating work to staff to ensure manageable day-to-day workload and exceptional in store experience. * Checking and signing invoices and credit notes on a weekly basis. * LIDS November ‘13 – January ‘15 Store Manager Completes store operational requirements by scheduling and assigning employees; following up on work results. Maintains store staff by recruiting, selecting, orientating, and training new employees. Achieves financial objectives by preparing an annual budget; scheduling expenditures; analyzing variances; initiating corrective actions. Maintains operations by initiating, coordinating, and enforcing program, operational, and personal policies and procedures. * Aeropostale January ’13 – November ‘13 SENOR MECH. FLOW (Stock manager) Keep customers satisfied and willing to return/recommend by providing a rewarding experience. Clean and maintain a clean store/work space for customer’s satisfaction and speed of service. As a customer service representative, assist customers in obtaining the correct service rendered. Teach and guide new employees to create and maintain a neat and organized stock room/floor to ensure speed of service and efficiency. Ecko Unlimited December ’11 – September ‘13 customer service/stock manager Assist customers with purchases. Ensure fast and accurate customer service. Manage overnight team to create an efficient stock room. Dress and un-dress......

Words: 364 - Pages: 2

Premium Essay

Marketing Assignment Anf

...malfunctions happen then the cost of repairing or replacing the damaged parts of the system can be costly. They should constantly check the system for potential errors since a minor glitch can potentially have a high impact on performance. Competitive Analysis – February 2009 FACTOR | Abercrombie & Fitch | American Eagle Outfitters | Aeropostale | Importance to Customer | Target Market Age | 18-22 | 15-25 | 14-17 | - | Price | $35 | $20 | $15 | High | Quality | High | Moderate | Moderate | High | Number of Stores | 1,035 | 987 | 828 | Moderate | Company Reputation | Sexually explicit or racist | Neutral | Children’s Line | Moderate | Apparel Type | Casual | Casual | Casual | High | Sales Method | Retail Stores and Online | Retail Stores and Online | Retail Stores and Online | High | Sales Promotions | End of season sales | Many sales promotions | Many sales promotions | Moderate | Rewards Program | No | Yes | No | Low | Net Sales (million) | $174.5 | $177.2 | $109.9 | - | Comparable Sales Growth | -27% | -7% | 11% | - | Two of Abercrombie & Fitch’s biggest competitors are American Eagle Outfitters and Aeropostale. The biggest difference in terms of sales is that Abercrombie & Fitch has a high-quality, premium-price strategy and does not have regular sales promotions whereas the two competitors do. Also, American Eagle has a rewards program which they call the All-Access Pass that gives the customer points depending on how much......

Words: 6415 - Pages: 26

Premium Essay

Trends in Popular American Culture

...layered items are interchangeable and can be put together in different ways, so I think I can honestly say that it saves me money. Money is the name of the game for retailers, too, especially in the current economic climate in the United States. Apparel sales for the 13-to-17-year-old set were nearly $30 billion for the 12 months ending May 2008, according to market researcher NPD Group's consumer tracking service. Add "tweens" and near-tweens - seven-to 12-year-olds - and college-age kids - 18 to 24 - and that figure soars to nearly $70 billion. Overall, sales are increasing only slightly. Department stores are struggling to compete with discounters like Wal-Mart and specialty merchants like Hollister, Abercrombie & Fitch, Aeropostale and American Eagle Outfitters - which typically feature darker lighting and even music that teens can identify to or relate with. With the economy in a downturn, many teens had trouble getting summer jobs and have less to spend. I believe that it is all media-driven, and it is about girls seeing celebrities on TV shows, movies and concert tours and now they get to communicate about clothing on social networking sites. More communicating tools are available to spread the word about fashion a celebrity is wearing. That drives tween fashion. In the emphasis on layering, many parents see a welcome trend that is long overdue. This is just to serve as an example of how trends can be followed by a large group of......

Words: 724 - Pages: 3