U.S. Aeropostale to eliminate around 100 Jobs to cut costs
Teen retailer Aeropostale Inc. announced on January 12, 2016 that it plans to eliminate about 100 jobs as part of a cost-cutting effort that targets USD 35 million to USD 40 million a year in savings before taxes
Aéropostale said it plans to cut by 13 % its corporate head count and regional managers by the end of this month and estimated it will record a pretax charge of about USD 1.5 million.
The New York-based retailer, which has been grappling with declining mall traffic and increased competition, has reported two consecutive years of losses. The chain is projected to end the current fiscal year in the red. Aéropostale is considering a reverse stock-split among other options as a way to regain compliance with the New York Stock Exchange.
Under New York Stock Exchange rules, the average closing price of a company’s stock must remain above USD 1 over 30 consecutive trading days and its market capitalization must be above USD 50 million.
Aéropostale’s stock, which on Tuesday set a new low before closing at 24 cents, has closed below the the one USD mark since Sept. 4, and its market capitalization has fallen to about USD 20 million, according to FactSet.
The company said, Chief Executive Julian R. Geiger had voluntarily given up a million stock options, which Aéropostale plans to use to retain other key staff members.
The company said it still expects to record a net loss of 4 cents to 17 cents a share for the quarter ending Jan. 30, with its sales and operating loss improving from the previous quarter.