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Aeropostale targets India for online growth

July 7, 2015 03:03 PM
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Details still are forthcoming, but beginning next year clothing retailer Aeropostale Inc. plans to launch an e-commerce site in India.

Aeropostale’s new licensing agreement with Arvind Lifestyle Brands Ltd., a subsidiary of Arvind Ltd., a large Indian textile manufacturer and retailer, calls for the two companies to launch an e-commerce site in India under the Aeropostale brand. The companies also would open up to 50 Aeropostale stores and 150 shop-in-shop stores across India over the next five years.

Under another licensing arrangement, Aeropostale, No. 150 in the Internet Retailer 2015 Top 500 Guide, also will work with Pt Mitra Adiperkasa, an Indonesian retailing company with more than 1,800 stores across Asia, to open up to 12 Aeropostale stores in Indonesia by 2020. The first store opening will be in Jakarta in the fall of 2016, but Aeropostale didn’t say if the licensing arrangement included e-commerce.

“We anticipate ending the year with over 300 locations across 17 countries,” Aeropostale CEO Julian R. Geiger says. “Our aggressive international growth underscores the strength and recognition of the Aeropostale brand.”

Aeropostale didn’t disclose specifics about the launch of its e-commerce operation in India. But India represents a growing e-commerce market with estimated web sales that grew 112% to $3.40 billion in 2014 from $1.60 billion in 2013, according to Forrester Research. By 2019 e-commerce sales could reach an estimated $19.1 billion while the number of online shoppers may grow over the next five years to a projected 124.6 million in 2019 from 35.9 million in 2014.

“We anticipate that India's online retail spending will increase at a compound annual growth rate of more than 51% over the next five years as more Indian consumers start purchasing online, especially via mobile devices,” Forrester research analyst Satish Meena wrote in a recent report.

Aeropostale looks to grow online overseas through new licensing arrangements as it tries to shore up its sagging financial performance.

Aeropostale stopped breaking out e-commerce as a separate metric, but even with its online results grouped into its comparable store sales the retailer saw a big drop in revenue for the first quarter.

For the first quarter ended May 2:

  • Total revenue dropped 19.5% to $318.6 million from $395.9 million in the first quarter of 2014.
  • Comparable-store sales, which include e-commerce, declined 11%.
  • Net loss was $45.3 million compared with a net loss of $76.8 million in the first quarter of 2014.
 

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