(Bloomberg)—A consortium led by mall operators Simon Property Group Inc. and General Growth Properties Inc. won an auction for the assets of Aeropostale Inc., with a plan to keep open 229 of the the bankrupt teen retailer’s 800 stores.
The bidding group will also keep the chain’s online business and licensing operation up and running, according to a statement late Thursday. A Manhattan bankruptcy judge must still approve the deal after reviewing the terms and any objections. A hearing on the matter has been set for Sept. 12.
Terms of the deal weren’t included in the statement, but the mall operators swooped in late Tuesday with a $243 million offer to save Aerospostale, which seemed destined for liquidation. Simon and General Growth teamed up with licensing firm Authentic Brands Group and liquidators Gordon Brothers and Hilco Merchant Resources to keep 229 stores open. It was a telling move for the mall operators, which aren’t typically in the business of running the retailers in its corridors. But mall owners are contending with a steady drumbeat of downsizing and bankruptcies, which have led to the highest number of U.S. store closures so far this year since 2010.
“Aeropostale looks forward to closing the sale and emerging from bankruptcy with new ownership as a financially stronger company positioned to compete and succeed in an evolving retail landscape,” the New York-based company said in the statement.
Aeropostale filed for bankruptcy in May, succumbing to competition from big-box stores, online merchants and “fast fashion” purveyors. The company also accused lead lender Sycamore Partners of pushing it into Chapter 11 to buy it on the cheap. The bankruptcy judge rejected that claim and allowed the private equity firm to take part in the auction.
“We are pleased with the outcome of the Aeropostale Inc. bankruptcy auction, which will result in the repayment of our debt while enabling the company to keep open more than 200 stores, preserve thousands of jobs and continue to serve customers,” Sycamore said through a spokesman.
The case is In re Aeropostale Inc., 16-11275, U.S. Bankruptcy Court, Southern District of New York (Manhattan).Favorite