Aeropostale will soon be latest retailer to shut down

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This article was published 05/05/2016 (3732 days ago), so information in it may no longer be current.

The hits keep coming for Winnipeg’s regional shopping malls as another major retail chain — teen-clothing retailer Aeropostale — prepares to disappear from the local landscape.

The New York-based company announced Wednesday it has filed for bankruptcy protection and will be closing all 41 of its Canadian stores and 113 of its U.S. locations. The closures represent 20 per cent of the company’s presence in North America. It will continue to operate 626 stores in the U.S.

Going-out-of-business sales will begin Monday at the Canadian locations, while sales at the U.S. stores will kick off this weekend. The company did not provide any details on how deep the discounts will be or when the Canadian stores will ultimately close. It also would not say how many jobs will be affected by its exit.

Aeropostale has three stores in Winnipeg, in the CF Polo Park, St. Vital and Kildonan Place shopping centres. It is the latest in a string of retailers who in the past 12 to 18 months have announced they’re closing down or reducing their footprint in Canada. Others include Le Château, Danier Leather, Mexx, Smart Set, Jacob, Future Shop and Target Canada.

The rash of store closings has pushed Winnipeg’s overall retail vacancy rate to its highest level in 15 years — about six per cent.

Kildonan Place general manager Peter Havens said Wednesday while the store closures have created some challenges for shopping-mall operators, he’s confident Kildonan Place will find a replacement tenant for its 3,800-square-foot Aeropostale space. He said it’s in a vibrant retail area with a strong and growing customer base.

“When the retailers come and see that, they want to be here, too,” he said. “So I don’t think it will be vacant for very long for us.”

He noted the retail industry experiences ebbs and flows. The last significant downturn was during the 2009 global recession, “and we bounced back from that OK.”

Kildonan Place took a big hit last year when it lost its 120,000-sq.-ft. Target store. Although that space remains empty, it was reported recently that Marshalls, HomeSense and H&M are all poised to lease a portion of it. Havens has refused to say who will be moving into that space.

“We’ve got some deals signed, but we want to have the whole package together, and then we’ll do a big announcement,” he said.

He said if the Target space is excluded, Kildonan Place has a vacancy rate of about 2.5 per cent, which is low by Canadian mall standards.

The general managers of the Polo Park and St. Vital malls could not be reached Wednesday for comment. However, St. Vital has also taken its share of hits in recent months. As recently as two weeks ago, it had more than a half a dozen vacant storefronts and an overall vacancy rate of about three per cent.

Manager Cheryl Mazur also expressed confidence at that time replacements will be found. But she admitted it will take longer than it would have 10 or 15 years ago when Canada’s industry was going through a major growth spurt.

Toronto-based retail consultant Maureen Atkinson said Aeropostale had faced stiff competition in Canada, vying for the same customers as other apparel retailers such as H&M, Forever 21 and Old Navy.

“They’ve always been at the low end of the price segment,” said Atkinson, who is with J.C. Williams Group. “They really weren’t great stores, and they weren’t really compelling. They didn’t have a personality.”

Aeropostale, which targeted the teen fashionista, has suffered along with its competitors under a vastly altered consumer landscape that took root during the recession.

“Fast fashion” outfits, with more inexpensive clothes, have emerged in recent years to take a growing market share from Aeropostale, Abercrombie & Fitch and American Eagle Outfitters, stores that not so long ago dominated the retail sector.

Aeropostale expects to emerge from bankruptcy protection within six months as a smaller company after renegotiating contracts and resolving an ongoing dispute with the investment firm Sycamore Partners, a major shareholder that pushed through changes in company leadership.

 

— with files from the news services

murray.mcneill@freepress.mb.ca