Hirzel Takes 6% Stake in Aéropostale
Investor Says Shares in the Teen Retailer Are Undervalued.
One more investor thinks teen retailer Aéropostale ARO +3.93% is hipper than it looks.
The apparel retailer's stock has fallen 27% amid wider troubles in the teen sector, but Dallas-based private investment firm Hirzel Capital Management LLC has taken a 6% stake in Aéropostale Inc. and called the shares undervalued.
Hirzel reported its stake Tuesday in a securities filing and said it plans to have discussions with management. The firm said the stake was taken for investment reasons and not for the purpose of acquiring control.
A representative for Aéropostale declined to comment. The company's shares rose 2.5% to $9.75 in after-hours trading.
Hirzel is the latest investor to get involved with the youth-focused apparel retailer. In September, Hummingbird LLC, which later changed its name to Lemur LLC and is indirectly owned by Sycamore Partners, reported a nearly 8% stake in the retailer, calling the company "an attractive investment."
Sycamore Partners has previously taken stakes in women's fashion retailer Talbots and teen retailer Hot Topic. It later took both companies private.
The teen retail sector, including Aéropostale, has been troubled by the rise of fast-fashion chains like Hennes & Mauritz HM-B.SK -0.58% and Forever 21.
Aéropostale, which operates children's and teen retail chains, has faced challenges in its core basics business, especially with its graphic T-shirts and fleeces. The company has been working to integrate more fashion into its product mix.
Rival Abercrombie & Fitch Co. warned early this month it expects a big drop in sales and margin pressure for the holiday period. "We recognize that our businesses have been and will continue to be disrupted by both fast fashion, H&M, Forever 21, and pure-play e-com competitors," said Leslee Herro, executive vice president for planning and allocation.