Aeropostale Inc. (NYSE:ARO): Gains 15% On Closing $150 Million Credit Financing


Dallas, Texas 05/28/2014 (FINANCIALSTRENDS) – Aeropostale Inc. (NYSE:ARO)’s stock yesterday recovered from 24.6% fell witnessed on Friday as its announced the closing of strategic partnership with Sycamore Partners affiliates. The company also announced to have inked definitive agreements for $150 million senior secured credit financing with Sycamore Partners. Earlier, the company announced that the credit financing will consist of a ten year $50 million term loan and five year $100 million term loan facility and include a souring arrangement with Sycamore Partners affiliate, MGF Sourcing.

The Transaction

Sycamore Partners received convertible preferred stock from Aeropostale Inc. (NYSE:ARO) as a part of this transaction, allowing it the right to acquire up to 5% in Aeropostale’s common stock. In addition, Aeropostale will require completing minimum annual merchandise purchases from sourcing partner MGF Sourcing for ten years. All amortization payments related to credit facility will be rebated, if Aeropostale fulfills its minimum annual purchase requirements. The strategic sourcing partnership is expected to diversify the company’s core apparel production while optimizing its supply chain.

Change in Board

In connection with the transaction, Aeropostale Inc. (NYSE:ARO) appointed Stefan Kaluzny and Julian Geiger as new members to its Board of Directors. Kaluzny is a managing director at Sycamore Partners and Geiger is former Chairman and CEO of Aeropostale. In addition, Arthur Rubinfeld will step down as a company’s Director. The company’s Board will nominate Kenneth Gilman as an independent director at the Annual Meeting of Shareholder. Mr. Gilman has been mutually selected by Aeropostale’s Board and Sycamore Partners. Gilman is presently director of Kate Spade & Co. as well as Zale Corporation.

Company Brief

Aeropostale is specialty retailer of casual apparel for mid-teens in age group of 14 to 17 years as well as 4 to 12 year old kids. The mall based retailer offers its products only at exclusive stores and online at and Yesterday, its stock gained nearly 15% and closed at $3.92. The stock traded with significant volume of 12.6 million shares against its 30 day average trading volume of 3.13 million shares.

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