Aéropostale Inc. has received bankruptcy court approval to access up to $100 million in interim financing.
The financing is part of a $160 million debtor-in-possession financing facility with Crystal Financial LLC. Aéropostale’s access of the financing now allows it to continue operating as a debtor-in-possession, and buys the teen retailer some time to try to reorganize the company or find a buyer.
Aero Investors, an affiliate of Sycamore Partners, had filed paperwork with the court objecting to the financing. Sycamore is embroiled in a bitter dispute with the retailer in connection with another affiliate, MGF Sourcing, which became one of Aéropostale’s largest suppliers.
The retailer filed its voluntary Chapter 11 petition for bankruptcy court protection on Wednesday. The petition listed total assets of $354.4 million and total liabilities of $390 million.
The teen retailer said it plans to emerge in six months with a “right-sized store footprint.” At the same time the company plans its reorganization, the retailer said it would also continue with its sale process. If a sale should occur, the company said it would be completed within the next six months during its tour of bankruptcy proceedings. Aéropostale also said it will close an initial 113 U.S. locations and all 41 stores in Canada. Store closing sales begin Saturday for the stores in the U.S. slated to be closed while those in Canada begin their sales on Monday.