Aeropostale wasn’t one of the retailers we examined in our recent retail study, but the story is familiar. The teen apparel retailer recently secured a $150 million credit line from private equity firm Sycamore Partners to keep the retailer afloat.
The story that’s so familiar is that another retailer is struggling and wondering why. On the surface, Aeropostale’s position as a teen retailer would seem to be a unique position.
There are numerous problems here, which is why I doubt the credit line will do very much. Aeropostale will just burn through more money.
The Aeropostale Problem
The main problems of retailers like Aeropostale are mainly two-fold. For one, the retailers and their messages – especially those targeted toward a younger demographic – are all the same. It’s about fashion, yes, but the difference in look and feel among these retailers is whisker thin.
Without differentiation, there is no true choice so all of them fail in some capacity.
Then there’s the online presence of the clothing brands themselves as well as Amazon. Retailers are beginning to see their brick and mortar strores as nothing but expensive billboards, and they can’t figure out how to crack the Internet shopping nut.
The problem can really be broken down to the fact that individual retailers are not preferred. Instead, they are just included in a crowded considered set that leaves them not being important.
And it’s not just the specialty shops like Aeropostale that are in this quagmire. Recently, I blogged about the ambitious “Yes” campaign by Kohl’s and concluded that it won’t do much because it basically says the same thing Kohl’s has always said: We have everything at a great price.
Until retailers can uncover the emotional triggers of their target audiences, and be truly different and better than the competition, you may see more retailers opening up a credit line that will get them in deeper debt.