Versa Eyeing Aeropostale For Purchase

Aeropostale’s 500 stores could potentially be on the path to be sold to private equity firm Versa Capital Management, a distressed investment specialist, according to papers filed in court last Thursday. Neither firm has officially commented on the news.

There is also no comment on what the terms of the deal might be in regards to price, or what the value would be for the bankrupt firm’s investors and leases. There is also some speculation that the offer rumors are going up as a sort of test balloon for an auction scheduled for Aug. 18.

Versa took over Wet Seal in 2015 and dropped $10 million off the bat to get the company up on its feet. Versa is thought to be Aeropostale’s best chance of a comeback play, though even with investment it won’t be easy.

Aeropostale still has to overcome the simple fact that it lost its teen audience and hasn’t figured out how to make sales without slashing their prices.

“I think it’s going to be a struggle for them unless they quickly define a better specific target market and rethink their margin problem,” noted Shelley Kohan, VP of retail consulting at RetailNext. “When you have razor-thin margins, you cannot expense your way into a profit, and that’s always going to be a challenge for them. And they’re going to have to figure that out.”