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Aeropostale back from the brink after auction


Aeropostale Inc. will live to see another day after all.

A consortium, including Simon Property Group Inc. General Growth Properties Inc. and Authentic Brands Group, won the bankruptcy auction for Aeropostale Inc. The group, which also includes liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, plans to keep at least 229 of the teen retailer’s stores up and running along with Aeropostale's e-commerce business and international licensing business.

The purchase price was $243.3 million, and assumption of certain debt.

The deal, however, still has to be approved by a Manhattan bankruptcy judge, who also has to hear any objections. The hearing is set for Sept. 12.

"Aeropostale looks forward to closing the sale and emerging from bankruptcy with new ownership as a financially stronger company positioned to compete and succeed in an evolving retail landscape," the retailer said in a statement.

The deal also ends the bitter disagreement between Aeropostale and its major lender, Sycamore Partners, which the retailer accused of planning a "loan-to-own" scheme to force the chain into bankruptcy.

Aeropostale had to make merchandise purchases MGF Sourcing, which is owned by Sycamore, as a condition of a loan it received from the private equity firm, Reuters reported.

Aeropostale accused Sycamore, of imposing, through MGF, "onerous" payment terms on the retailer in attempt to hurt its cash position. The private equity firm refuted the claims.

“We are pleased with the outcome of the Aeropostale bankruptcy auction, which will result in the repayment of our debt while enabling the company to keep open more than 200 stores, preserve thousands of jobs and continue to serve customers," Sycamore said in a statement.

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