Aeropostale is a brand a lot of us remember from our mall days. If you spent any time in an American shopping mall between the early 2000s and 2010, you probably saw those bright blue and white graphics everywhere. The company built a reputation for comfortable basics and affordable clothes, marketed mostly to teens and college students.
But over the past decade, there have been plenty of rumors about Aeropostale shutting down for good. With many classic mall brands struggling, shoppers are right to wonder: Is Aeropostale going out of business, or is there more to this story?
How Did Aeropostale Get Here?
Let’s start with some history. Aeropostale opened its first store back in 1987 and grew fast, eventually reaching hundreds of stores across the U.S. The clothes were easy to wear, trendy, and priced low enough that most high schoolers could grab something on a trip to the mall.
Aeropostale’s peak years were probably before 2010. After that, things started to get trickier. The fashion market began shifting, competition from fast-fashion retailers soared, and online shopping started stealing more and more business away from traditional mall chains.
The First Chapter 11: What Happened in 2016?
By 2016, Aeropostale was in a tough spot. The company hadn’t turned a profit for over three years—13 straight quarters of losses, to be exact. At that point, Aeropostale had more than 800 stores. But they couldn’t keep up with changing styles, better deals online, and stiff competition.
In May 2016, Aeropostale officially filed for Chapter 11 bankruptcy protection. They weren’t trying to vanish overnight, but it was a clear sign that the business was hurting badly.
So, what was behind all those losses? The usual suspects played a role—slipping sales, fewer mall shoppers, and lots of clothing stores all going after a shrinking pool of teen customers. Internally, though, another big issue popped up: Aeropostale’s relationship with an important supplier called MGF Sourcing.
MGF Sourcing was owned by Sycamore Partners, a private equity firm. Around that time, MGF raised their prices and tightened payment terms with Aeropostale, the company later alleged in court. Aeropostale claimed this pressure was brutal enough to help push them into bankruptcy.
When they filed in May 2016, the company said it would close 113 U.S. stores and all 41 Canadian ones. That was about 20 percent of their locations. These closures weren’t a full retreat but were enough to worry longtime fans and employees.
Selling the Brand to New Owners
For a few months, things looked iffy. Chapter 11 lets companies restructure, but sometimes it just means they’re getting ready to liquidate. Rumors spread that Aeropostale might vanish entirely.
Then, in September 2016, a bankruptcy judge signed off on an asset sale. Aeropostale’s brand and part of its assets went for $243.3 million, bought by a group led by General Growth Properties and Authentic Brands Group.
This deal pulled Aeropostale out of a complete freefall. It saved about 229 stores and kept the brand alive—just not at the size it once was. A lot of analysts pointed out that with mall landlords now owning part of the business, Aeropostale’s focus was probably going to shift to the most profitable stores and tighter control.
Second Bankruptcy Filing: More Store Closures
Aeropostale managed to limp along after 2016, but it wasn’t all smooth sailing. The rise of online shopping and the popularity of brands like H&M, Zara, and American Eagle kept the pressure high.
Eventually, Aeropostale found itself back in court. According to recent news reports, the company filed for bankruptcy protection again, spurred by continuing losses and shopper habits shifting even more during the COVID pandemic.
This second filing meant more store closings. The company shuttered another 113 of its 739 U.S. stores, plus all 41 Canadian stores—cutting out underperforming locations and hanging onto the most viable ones. Many of these closures involved “going out of business” sales that started soon after the announcement, which led to confusion over whether the entire chain was shutting down.
It’s easy to see why people ask if Aeropostale is actually going out of business when stores keep disappearing. But each time, the company has managed to keep a core group of stores and online sales up and running.
Why Has Aeropostale Struggled So Much?
It’s not just about bad management decisions, although every business makes its share of mistakes. Aeropostale faces some tough headwinds that go beyond any one CEO or boardroom.
First, the competition is brutal. So many fast-fashion chains and direct-to-consumer brands have appeared over the past decade. Kids today are likely to shop at Shein or scroll through TikTok for style inspiration, instead of heading to the mall.
Second, department stores and other mall chains also fight over the same teenage and young adult shoppers. Aeropostale has been squeezed by budget-friendly brands on one side and trendier, premium shops on the other.
Third, there’s the slow drain from e-commerce. When people switched to shopping online, Aeropostale needed to adjust—fast. But shifting gears from brick-and-mortar to digital sales isn’t easy for any traditional retailer.
There’s also the on-again, off-again pressure from big suppliers and investors, like MGF Sourcing and Sycamore Partners. When the terms of business suddenly change, especially for a struggling company, the outcome is rarely good.
What Does the Future Hold for Aeropostale?
Even after two bankruptcies, Aeropostale hasn’t completely disappeared. That might be surprising, but there are a few reasons for it.
Bankruptcy protection isn’t always a death sentence for companies. It can give them some breathing room to close weak stores, get out of expensive leases, or try to negotiate better terms with suppliers. Both times Aeropostale filed, they used bankruptcy to slim down, try to become more efficient, and focus on the pieces of business that still work.
The new owners, especially Authentic Brands Group (which also owns brands like Forever 21 and Lucky Brand), look for ways to keep familiar names alive, albeit in smaller, more focused ways. The strategy is about keeping a lower profile—fewer stores, tighter inventory, and a big online push.
Renegotiating supplier contracts and cutting back on unprofitable stores are two common tactics. In some cases, landlords have actually taken a stake in Aeropostale to keep anchor tenants drawing traffic at their malls. Mall owners have a strong reason not to let too many vacant shops sit empty, so it’s in their interest to help brands stick around, even if it’s on a smaller scale.
Aeropostale has also dabbled with pop-up stores, stronger e-commerce, and different product lines. By focusing on what their audience really wants—meaning, basics that don’t try too hard to chase every fast-moving trend—they’re betting on slow but steady recovery.
For those tracking the overall mall and retail business, Aeropostale stands as one example among many where a business can shrink, pause, regroup, and then try again rather than simply ceasing to exist. (For more on other retailers caught in this loop, check out Eve of Business for similar breakdowns.)
Where Aeropostale Stands Now
If you’re wondering if Aeropostale is “going out of business,” the answer is “not completely—but they’re a lot smaller now.” A significant number of stores are gone, including every Canadian location. But they’re still operating in places where they believe they can make money, and they’ve built out a stronger web presence as shopping habits have shifted.
The brand might not have the same buzz it did fifteen years ago, but that’s not what today’s owners are aiming for. Aeropostale’s current mission is to remain relevant for its core fans and capitalize on affordable basics where they see steady demand.
If you visit a large U.S. mall, there’s a chance you’ll still spot the Aeropostale sign. It’s no longer the guaranteed mall staple it once was, but it hasn’t gone the way of totally shuttered chains like The Limited or Wet Seal—for now, anyway.
The Takeaway
Aeropostale has had a rough financial journey, no question about it. From massive expansion in the early 2000s to deep decline and store closures after 2016, the company has fought hard to stick around.
Two bankruptcy filings, hundreds of store closures, and a major shuffle in ownership later, Aeropostale still hasn’t called it quits. They’re smaller than they used to be, more focused, and part of a larger group that specializes in keeping old brands alive.
If you want a quick summary: Aeropostale isn’t fully out of business, but it’s no longer the big mall player it once was. The company has survived tough times by shrinking to fit the times—and by sticking to basic, budget-friendly clothes that still appeal to a slice of shoppers. Whether that’s sustainable long-term is an open question. But for now, Aeropostale is still around, still fighting, and still hanging on for another season.
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