As Problem With Sycamore Worsened, Aeropostale Can Use Its Instagram Star
The ailing retailer has secured deal with YouTube star Bethany Mota to designed her clothing line for Aeropostale since 2014. However, until now the teen clothing retailer has not been able to maximize the popularity of Mota and attract millenials.
Last week Aeropostale reported another consecutive quarterly loss for thirteen times in the fourth quarter ended on January 30. The sales fell 16% and sales from its e-commerce channe decreased 8.6%. This added to a full year decline of net sales by 18% in 2015 from $1.8 billion in last year.
The company was also in dispute with key vendor MGF Sourcing, which affiliated with Sycamore Partners, the firm that saved Aeropostale in 2014 and a major shareholders. The dispute has obstructed supply in many of its stores, moreover, the company's share plunged again on Friday. USA Today reported the company's share was closed at 25 cents a share, far deeper into penny-stock territory.
In a conference call with financial analysists Aeropostale CEO Julian Geiger said, "There will be factory exclusives and mall exclusives which will be geared specifically to the customer preferences we've identified." He is optimistic, "We believe that our revised merchandise assortment and our more targeted merchandise allocation approach in our factory chain will reinvigorate our stores, delivering our customers the product and shopping experience they desire."
However, the retailer has an ace which has not been maximized, a YouTube and Instagram star Bethany Mota. The 20-year old Internet personality with 5.6 million subscribers in her YouTube channel, 2.5 million Instagram followers, and 1.3 million Twitter followers is an untapped resources. Aeropostale has been in cooperation with Mota since December 2013, as she sell her clothing, perfume, and accessories line in Aeropostale's store.
CNBC reported that Mota can do more for Aeropostale, as her popularity has brought much-needed traffic into Aeropostale stores. However, her line in the stores only accounted to less than 10%, analysts said.
Analyst at Conlumino, Håkon Helgesen said that now the company's dependence on Mota is more pronounced than ever as Aeropostale remains out of favor with the fickle younger consumer.
"Indeed, [Aéropostale] has now become a brand that gets overlooked on many shopping trips simply because its range does not resonate and has little relevance," Helgesen told Digital Trends, "While consumer tastes have shifted, Aero has steadfastly clung to a range that looks more at home in the mid-2000s than 2016, and a store environment that all too often resembles a yard sale."
As Aeropostale's problem gets deeper, it is time to utilize their untapped asset. Bethany Mota, the YouTube and Instagram star may be the last hope to help Aeropostale.