While its peers struggle to maintain sales, let alone any profitability, teen-focussed Aeropostale is trading off the scales.

A tired, boring seller of unremarkable clothing until 2005, Aeropostale took on a whole new direction - and success - after management committed to a reinvention.

Today it has around 900 stores across the US - and has up to 50 more planned for the current calendar year. It's aiming for $2 billion in annual sales.

In May, Aeropostale posted a massive 30 per cent increase in sales year on year - an astonishing performance considering the vast majority of US retailers, regardless of category, are reporting sales slumps stretching as much as 25 per cent! And it was just new store openings driving growth - same store sales were up 19 per cent.
So what's the secret?

Reinvention, good recruiting and training - and focus.

Tom Johnson, executive VP & COO told the group outside the newly-refurbished Garden State Plaza store in New Jersey, that back in 2005 Aeropostale was in retailing's version of the Dardanelles. Becalmed sales reflected a tired store format and an uninspiring range.

"Our product got stale, it was too commoditised," recalls Johnson.

A conservative company it tended to follow trends, not set them.

"Less than 10 per cent of our assortment was considered to be aspirational."

Once they recognised their mistake and started ranging more appealing, yet affordable, clothes for the target market the business showed an immediate lift. "We'd just got stale," he repeats.

Some of the steps to recovery were simple: The company introduced mannequins into its stores and dressed them in combinations of stock "so guys could get a sense of how they'd look".

Core foundations of the Aeropostale retail concept are great value, strong visual presence, great fashion, promotions and best sales associates, says Johnson.

Staff are well trained, (an attractive in both looks and personality) and Aeropostale runs with a higher staff to customer ratio on the shop floor than is usual in other value-driven retail brands.

"The exchange with the customer is paramount to our success," says Johnson.

All too aware they're taking sales away from rivals, Aeropostale is mindful not to let success get to its corporate head. It maintains tight control of its overheads - Johnson even answers his own phone at head office - and they have seen the mistakes made by other US retailers in rolling out too many stores.

"We don't want to expand for the sake of it. We don't want to get caught in the same trap as our competitors."

It also eschews loyalty card programs - a policy that reflects how the company understands its customers, primarily teenagers between 13 and 17. They know kids like to shop different stores, so Aeropostale tries to target a share of those customers' clothing spend rather than all of it.

The average Aeropostale store will turn over US$2 million annually and generally outperform mall median figures, with an average 60,000 transactions by 170,000 customers from a 3500sqft space.

Since remodelling and expanding the Garden State Plaza store (pictured) turnover has nearly doubled in a year. But its flagship - in the massive Mall of the Americas in Minneapolis - has achieved 11 consecutive years of same store sales growth on the back of an increasingly diverse cross section of teenagers travelling to the shopping Mecca.

And no doubt reflecting the more prudent modern day selection of stock, too...

 

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