After a long period of prosperity since its establishment in 1980, Aéropostale hit its peak in 2010 in terms of revenue and began its way toward a steady downturn. Unable to adapt to the changing market segments resulting in declining sales, Aéropostale’s revenue decreased by an average of 17.5% annually in recent years, which contributed to a declining gross margin. In October 2015, Aéropostale’s stock price reached an all-time low of $0.47 (Appendix A).
Background
In the first decade of the 21st century, Aéropostale attempted to establish itself as a low-cost differentiator in apparel for adolescents and young adults. As compared with those of its main competitors, such as Abercrombie & Fitch and American Eagle, Aéropostale’s prices for …show more content…
However, around the time Thomas Johnson became CEO in 2011, Aéropostale’s brand image began to deteriorate. Its share value and operating margin fell over 90% and 16%, respectively, in the following four years. As an attempt to combat these effects, Aéropostale expanded their portfolio of brands to include “Live Love Dream”, “Tokyo Darling”, and “PS from Aéropostale”, the latter of which catered specifically to children under the age of …show more content…
With this additional cash, Aéropostale intends on going abroad to research customer preferences in order to predict which products would become fashionable.
As an initial step to rebuilding its brand image, Aéropostale has began to remove branding from its clothes, since this technique has become unpopular. Aéropostale plans on reaching out to international marketplaces in Europe and Asia to establish its name globally.
Aéropostale intends on producing apparel that would “make [teenagers] feel safe” so that they will not be the subject of ridicule for their peers. Since the CEO, Geiger, believes that teenagers strive to find a balance between individuality and fitting in with their peers, Aéropostale will design products that accommodate this dichotomy.
Next Steps
In earnings call in late August, 2015, Geiger stated his plans for a “more credible and relevant approach to marketing” as well as “new and understandable merchandise filters.” He also planned to expand Aéropostale globally. Although we believe that international expansion and a better understanding of market trends will be crucial if Aéropostale is to have a chance at rebuilding its customer base, in our opinion, Geiger’s vision needs to be refined. His strategy needs more clarity and specific
Background
In the first decade of the 21st century, Aéropostale attempted to establish itself as a low-cost differentiator in apparel for adolescents and young adults. As compared with those of its main competitors, such as Abercrombie & Fitch and American Eagle, Aéropostale’s prices for …show more content…
However, around the time Thomas Johnson became CEO in 2011, Aéropostale’s brand image began to deteriorate. Its share value and operating margin fell over 90% and 16%, respectively, in the following four years. As an attempt to combat these effects, Aéropostale expanded their portfolio of brands to include “Live Love Dream”, “Tokyo Darling”, and “PS from Aéropostale”, the latter of which catered specifically to children under the age of …show more content…
With this additional cash, Aéropostale intends on going abroad to research customer preferences in order to predict which products would become fashionable.
As an initial step to rebuilding its brand image, Aéropostale has began to remove branding from its clothes, since this technique has become unpopular. Aéropostale plans on reaching out to international marketplaces in Europe and Asia to establish its name globally.
Aéropostale intends on producing apparel that would “make [teenagers] feel safe” so that they will not be the subject of ridicule for their peers. Since the CEO, Geiger, believes that teenagers strive to find a balance between individuality and fitting in with their peers, Aéropostale will design products that accommodate this dichotomy.
Next Steps
In earnings call in late August, 2015, Geiger stated his plans for a “more credible and relevant approach to marketing” as well as “new and understandable merchandise filters.” He also planned to expand Aéropostale globally. Although we believe that international expansion and a better understanding of market trends will be crucial if Aéropostale is to have a chance at rebuilding its customer base, in our opinion, Geiger’s vision needs to be refined. His strategy needs more clarity and specific