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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA consortium led by Indianapolis-based mall giant Simon Property Group Inc. and rival General Growth Properties Inc. has won an auction for the assets of Aeropostale Inc., with a plan to keep open at least 229 of the bankrupt teen retailer’s stores.
The bidding group will also keep the chain’s online business and licensing operation up and running, according to a written statement issued 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.
Earlier this week, the Wall Street Journal reported that the Simon Group bid $243.3 million.
Besides Simon and General Growth, the winning group includes licensing firm Authentic Brands Group and liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, sources told the Wall Street Journal.
“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.
Sycamore had an advantage in the auction because it was able to use the roughly $150 million in debt it is owed in lieu of putting up cash, but it apparently did not come up with enough extra funding.
In May, Aeropostale said it would close 113 of its 739 U.S. stores and all 41 locations in Canada. The closures hit Indiana stores at College Mall in Bloomington and Jefferson Pointe in Fort Wayne.
Aeropostale has Indianapolis-area stores at Castleton Square, Circle Centre, Hamilton Town Center, Perry Crossing and Greenwood Park Mall.
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