Sycamore Takes 8% Stake in Aeropostale

aeropostaleNew York—Last month, Aeropostale Inc. saw its stock take a hit after reporting that it swung into a second quarter loss and sales fell 6%. Today, the troubled teen retailer saw its shares jump as much as 19% upon news that a private equity firm Sycamore Partners took a $54 million stake in Aeropostale.

Through its affiliate, Hummingbird LLC Sycamore bought 6.25 million shares, an 8% stake, between August 23 to Sept. 11 which Sycamore called “an attractive investment.”

While Sycamore declines to comment further about the investment, its stake raises the possibility that Sycamore might take the retailer private.

“We believe Hummingbird will attempt to take the company private,” Stifel Nicolaus analyst Richard Jaffe said in a research note.

Earlier this year, for example, Sycamore took Hot Topic Inc. private for $600 million, and in 2012 it snapped up Talbots Inc. for $391 million including debt.

In August, Aeropostale forecast another difficult third quarter due to “a highly promotional and competitive teen retail environment.” The retailer plans to close 30 to 40 stores this year, up from its previous estimate to close 15 to 20 stores.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com