Reportedly, Aéropostale borrowed roughly $150 million from Sycamore in 2014, but the relationship quickly turned contentious with Aéropostale accusing Sycamore of interfering with shipments and lines of credit.
A consortium of bidders including the two largest U.S. mall owners Simon Property Group SPG -0.20% and General Growth Properties GGP -0.41% has placed a late “going concern” bid for Aéropostale assets that would keep the chain alive with a much reduced footprint of 229 stores, according to a federal bankruptcy court filing.
Major Aéropostale landlords Simon Property Group and General Growth Properties are part of the joint Aéropostale venture with Authentic Brands, along with liquidators Gordon Brothers Retail Partners LLC, and Hilco Merchant Resources LLC. An auction that was slated to begin Monday in New York was adjourned Tuesday to let the deal coalesce.
Last week, Judge Sean Lane in New York issued a ruling that allowed private-equity firm Sycamore Partners to bid at the auction by offering to cancel $150 million of loans it made to Aéropostale. The decision gave Sycamore, which controls a key lender to Aéropostale, the upper hand at the coming auction, because rivals would have to come up with cash.
Sycamore said earlier this week it made an offer for Aéropostale, but the private-equity firm has repeatedly said liquidation is likely the best offer, which has been struggling to pay rent on hundreds of stores while competing with newer, more-nimble fashion sellers.
Aéropostale filed for bankruptcy protection in early May and began shuttering 150 of its 800 stores.
