Aéropostale Inc. got something of a scare just before Halloween.
The teen retailer said that on Oct. 30 it received notice from New York Stock Exchange that it was not in compliance with the market’s listing rules.
Investors were not happy and pushed the stock down 10.2 percent to 75 cents in midmorning trading on Thursday, leaving the firm with a market capitalization of $59.3 million.
“As of October 28, the average global market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, stockholders’ equity was less than $50 million,” Aéropostale acknowledged.
Companies that do not trade on a major exchange have a much lower profile in the investment world and have trouble getting big institutions to buy their equities.
The notice has no immediate impact on the listing of the retailer, which said it has 45 days to submit a plan to the exchange on how it would get back into compliance. If the exchange accepts Aéropostale’s plan, the company will have 18 months get back into the exchange’s good graces.
In September, Aéropostale said it might consider a stock split after its closing price fell below the exchange’s $1 minimum for 30 consecutive days.
The chain’s net sales dropped 17 percent to $336.9 million in the second quarter ended Aug. 1, as net losses narrowed to $43.7 million from $64 million a year earlier.
Chief executive officer Julian Geiger said at the time: “The second quarter was an important transitional time for us in which we set the stage for the second half of the year. We attained very high levels of merchandise currency, delivered our new back-to-school merchandise and refocused our marketing efforts around key items, all while attaining operating results consistent with the better end of our guidance.”
Aéropostale, like other teen retailers, has struggled as traffic at the malls has waned and as the ever-fickle taste of young consumers changes yet again and takes on a more digital bent.