US teen retailer Aeropostale to shut 75 stores as sales continue to fall

American apparel retailer Aeropostale reported its eight straight quarterly loss, hurt by higher discounts and falling demand, and is set to close about 75 stores in the current quarter. -- PHOTO: AEROPOSTALE
American apparel retailer Aeropostale reported its eight straight quarterly loss, hurt by higher discounts and falling demand, and is set to close about 75 stores in the current quarter. -- PHOTO: AEROPOSTALE

New York (Reuters) - Teen apparel retailer Aeropostale reported its eight straight quarterly loss, hurt by higher discounts and falling demand, and said it would close about 75 stores in the current quarter.

The company also forecast a bigger-than-expected fourth-quarter loss, sending its shares down 9 per cent after market.

Traditional retailers in North America have been forced to slash prices to fight off intense competition and try to win back customers who increasingly prefer shopping online.

The closure of 75 Aeropostale stores in the fourth quarter will take the company's total US and Canada closures to about 120 stores in 2014, well ahead of its guidance of 40 to 50 closures this year, Aeropostale said on Wednesday's post-earnings call.

It is also considering closing another 50 to 75 Aeropostale stores in 2015, as well as 126 mall-based P.S. from Aeropostale stores by the end of January, as it continues to struggle to keep pace with changing trends and attract its target teenage customers.

Like other teen apparel retailers, the company has been losing out to fast-fashion brands such as H&M, Forever 21 and Inditex's Zara, which bring the latest styles from the runway to their stores within weeks.

Rival Abercrombie & Fitch Co also reported disappointing quarterly results earlier on Wednesday and cut its full-year profit forecast.

Same-store sales at Aeropostale fell 11 per cent in the third quarter, the ninth quarter in a row that they have declined.

The company said same-store sales fell in the mid-teens in percentage terms over Thanksgiving and the Black Friday weekend, in contrast with November's low single-digit percentage increase.

Aeropostale's net loss widened to US$52.3 million, or 66 cents per share, in the third quarter ended Nov. 1, from US$25.6 million, or 33 cents per share, a year earlier.

The company said it expected to record a loss of between 37-44 cents in the fourth quarter, bigger than analysts'expectations of a loss of 36 cents per share.

Revenue fell to US$452.9 million from $514.9 million a year ago.

Excluding items, Aeropostale reported a loss of 45 cents per share, in line with the average analyst estimate.

Up to Wednesday's close, the stock had fallen nearly 65 per cent this year.