This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

[video] Activist Investor Buys 8% Stake in Aeropostale

NEW YORK ( TheStreet) -- Aeropostale (ARO - Get Report) shares were surging 17% after Hummingbird LLC disclosed in a regulatory filing that it purchased nearly an 8% stake in the teen retailer.

Hummingbird is indirectly owned by Sycamore Partners, a New York-based private-equity fund focused on consumer and retail investments,which owns Hot Topic and Talbots. Sycamore has approximately $1 billion in capital under management as of June 2013, according to its Web site.

According to a Securities and Exchange Commission13D filing on Tuesday, Hummingbird acquired 6.25 million shares, or 7.96%, of Aeropostale's common stock.

The share acquisition, valued at about $53.9 million, is seen as "an attractive investment," and part of the investment activities on behalf of Sycamore Funds, the filings said.

Aeropostale shares were rising 16.5% to $10.04.

"The reporting persons may communicate with the issuer's management, members of the issuer's board of directors, other stockholders of the issuer and other relevant parties concerning the business, assets, capitalization, financial condition, operations, management, governance, strategy and future plans of the issuer," the filing said.

Stifel analyst Richard Jaffe said he believes that Hummingbird will attempt to take the company private at a price of about $10 a share.

"Given Sycamore Partners' track record, we believe Hummingbird will ultimately attempt to take Aeropostale private," Jaffe wrote in a research note. "In our opinion Stefan Kaluzny, co-founder of Sycamore Partners, is involved in the bid on ARO and his presence, in our opinion, adds credibility to the bid and in our estimation, the likelihood of its success."

Aeropostale reported an adjusted loss of 34 cents a share for the second quarter. Analysts were expecting a loss of 24 cents a share. The retailer said net sales dropped 6% in the quarter to $454 million, while comparable-store sales plunged 15% compared to the same period a year earlier.

Aeropostale joins the likes of the teen retail segment, including Abercombie & Fitch (ANF) and American Eagle Outfitters (AEO), which reported dismal earnings and weak outlooks for the rest of the year as their target segment spends their dollars elsewhere.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

>To submit a news tip, email: tips@thestreet.com.



Follow TheStreet on Twitter and become a fan on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ARO $4.03 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs