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Aeropostale may sell out

US youth fashion chain Aeropostale is considering putting itself up for sale after delivering its 13th consecutive quarterly loss.

The company says it is “exploring strategic alternatives” for the future of the business and has retained Stifel and other advisers to assist in a review.

The company, which specialises in cheap t-shirts and casual wear for teenagers upwards,  reported a 16 per cent drop in quarterly sales to January 31, due to heavy discounting as it tried to attract shoppers back into its stores. It closed an unspecified number of retail outlets.

Aeropostale is also in a debilitating dispute with a key vendor, MGF Sourcing, an affiliate of private equity company Sycamore Partners, which three years ago invested US$150 million into Aeropostale to help keep it afloat. That dispute is disrupting the supply of merchandise to stores and affecting the company’s “short term visibility” according to CEO Julian Geiger.

Geiger says the company will focus on factory outlet stores as it tries to turn the business around.

Aeropostale’s share price fell 52 per cent after it said it may face cashflow challenges if it could not resolve the dispute with MGF.

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