Aéropostale Files For Bankruptcy; Gets Commitment For $160 Mln In DIP Financing

(RTTNews) - Aéropostale, Inc. (AROP), a specialty retailer of casual apparel and accessories, Wednesday said it has commenced voluntary chapter 11 process with commitment for $160 million in DIP financing.

The company filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.

In conjunction with the Chapter 11 filings, Aéropostale secured a commitment for $160 million in debtor-in-possession or DIP financing provided by Crystal Financial LLC. This, combined with operating cash flow, will allow Aéropostale to meet its go-forward financial commitments.

Aéropostale intends to emerge from the Chapter 11 process within the next six months as a standalone enterprise with a smaller store base, increased operating efficiencies and reduced SG&A expenses.

The Company is also continuing its previously announced sale process to confirm that it is maximizing the value of its assets and achieving the best possible outcome for stakeholders.

Any potential sale would be expected to be completed within the next six months.

Further, the company is reviewing its leases and other contracts to ensure they are competitive with current market dynamics. The Company announced an initial store closure list of 113 U.S. locations, as well as all 41 stores in Canada.

Store closing sales are scheduled to begin in the United States during the weekend of May 7-8, 2016, and in Canada during the week of May 9, 2016.