<h1>Distribution Strategy of Aeropostale</h1>
Aeropostale, Inc. usually referred to as Aeropostale or Aéro, is an American clothing retailer that sells casual clothing with over 900 stores in the United States, Canada, Puerto Rico and the United Arab Emirates. Their stores tend to be located in shopping malls and large marketing areas. Aeropostale sells fashion apparel including outerwear, footwear, swimwear, tank tops, shirts, jeans, underwear, accessories and fleece. Building on the success of the Aeropostale teen brand the company has now launched a new brand, P.S. from Aeropostale, that sells clothing for children.
Distribution Strategy
Aeropostale is a smaller company, operating only one brand of stores that targets 14 to 17 year olds. Aeropostale's business model also relies heavily on sales and promotions as opposed to ANF's high-quality, premium-price strategy. However, Aeropostale recently launched a new concept called Jimmy'Z, which is a chain of stores targeting 18-24 year olds with surf inspired apparel which will compete directly with Hollister stores if the concept grows.
With a 21.1% earnings yield and a 65.6% return on total capital, Aeropostale is the 12th-most-attractive stock in the market, according to my Greenblatt-based approach.
Another strategy high on Aeropostale: my James O'Shaughnessy-based growth stock model. This approach looks for stocks with market caps of at least $150 million, a price/sales ratio below 1.5, and a track record of having upped earnings per share in each year of the past five-year period.
Then it takes the 50 stocks from that group with the highest relative strength over the past year and gives them final approval.
Aeropostale's $2.3 billion market cap, strong earnings history, 0.95 P/S ratio, and relative strength of 59 are good enough to make the grade.
My Peter Lynch-based strategy also likes Aeropostale. It considers the firm a "fast-grower" -- Lynch's favorite type of investment -- thanks to its impressive 33.6% long-term EPS growth rate. (I use an average of the three-, four-, and five-year EPS figures to determine a long-term rate.)
Lynch famously used the P/E/Growth ratio to find bargain-priced growth stocks, and Aeropostale's 0.3 P/E/G falls into my Lynch model's best-case category (below 0.5). This model also likes that Aeropostale has no long-term debt.
While the firm isn't the sort of large, big brand name company Buffett's Berkshire Hathaway usually keys on, it does have many of the fundamental, quantitative characteristics Buffett reportedly looked for while building his empire.
Among those qualities: a lengthy history of increasing annual EPS (Aeropostale has upped earnings in each year of the past decade); manageable debt (it has no long-term debt); and a high return on equity, which is a sign of the "durable competitive advantage" Buffett is known to seek (Aeropostale's 10-year average ROE is 32.9%, more than doubling this model's 15% target.)
While Aeropostale's shares have stumbled in recent months, the firm's track record of impressive performance in good and bad economic times, strong balance sheet, and attractive valuation metrics -- combined with a U.S. consumer who has been surprisingly resilient recently -- make the stock one to watch in 2011.
The firm, which targets youngsters age 14 to 17 through more than 900 stores in 49 states, Puerto Rico, and Canada, and 7- to -12-year-olds through its P.S. from Aeropostale stores, earns approval from four of my models.
On August 3, 2007, the first Canadian Aeropostale store opened in White Oaks Mall in London, Ontario. Aeropostale now operates 45 stores in major malls across Canada with the most recent opening November 5, 2010 in the Southgate Centre, Edmonton Alberta.
In May 2008, Aeropostale opened its first store in Puerto Rico at Plaza Carolina. The following weeks, Aeropostale opened two more stores located in Plaza Las Américas and in Prime Outlets, Puerto Rico. The company plans to open 12 to 14 more stores in Puerto Rico by the end of 2010.
In March 2009, Aeropostale expanded its operations to the Middle East, opening its first store in Dubai, United Arab Emirates.The company plans to open over 20 stores in the region over the next few years, including stores in Kuwait, Bahrain, Qatar, and another store in the United Arab Emirates.
Aero is one of the most popular teenage clothing stores around the United States. Other popular stores include American Eagle, Old Navy, Hollister Co., and Gap.aneasystoretostealfrom!
In 2007, the company began doing promotions with successful figures to increase brand awareness. The first promotion was selling the Fall Out Boy album Infinity on High with a store-exclusive T-shirt. Other offers include a free beach towel with every $50 purchase and a free holiday bear with a purchase of over $100, each promotion in its respective season. These holiday bears are also donated by Aeropostale stores to local charities in their respective communities. In 2008, Aeropostale, along with not-for-profit youth organization Do Something, launched "Teens for Jeans", a campaign to raise awareness of teen homelessness. Stores would collect lightly used jeans and donate them to local charities. In return, donators received a 20% (2008) or 25% (2009) discount on a new pair of Aeropostale jeans. In 2008, the campaign raised over 125,000 pairs of jeans. In 2008 and 2009, Aeropostale donated 10,000 pairs of new jeans to the campaign.In 2010, after the aftermath of the Earthquake in Haiti, for every pair of jeans that was donated by customers, Aeropostale sent a brand new pair to Haiti. Also they promoted the show Greek Season 1 DVD with a free T-shirt with a $50 purchase
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