Aeropostale Said to Prepare for Bankruptcy as Soon as This Month

NEW YORK, United States — Aeropostale Inc., the teen-clothing chain that has suffered years of losses, is preparing to file for bankruptcy as soon as this month, according to people familiar with the matter.

The company is looking to reorganise under Chapter 11, said the people, who declined to be identified because the matter isn’t public. Aeropostale is trying to work out a loan to finance its operations during the bankruptcy process, according to the people. A deal to avert a filing or find a buyer also could still emerge, they said.

Aeropostale’s trip to bankruptcy court would follow three straight years of losses and a feud with its main lender, Sycamore Partners, which also owns a key clothing supplier. The New York-based retailer has struggled to hang on to teen consumers, who have shifted to online shopping or chains like H&M.

Representatives for Aeropostale and Sycamore declined to comment.

The company said last week that it would delay filing its annual report while it explores its options. Aeropostale announced plans in March to evaluate strategic alternatives, tapping Stifel Financial Corp. to help assess a possible sale or restructuring. The company also is working with law firm Weil Gotshal & Manges LLP and FTI Consulting Inc., people familiar with the matter said last week.

A filing would allow the company, which has more than 800 stores, to quickly close a large number of locations.

By Lauren Coleman-Lochner.