Although the recently wrapped holiday shopping season was a big disappointment for most retailers, especially in the apparel sector, Aeropostale bucked the trend by boasting a same stores sale increase of 12% for December. Total net sales for the five-week period ending January 3, 2009 increased 25% to $392.7 million, from $313.4 million for the five-week period ending January 5, 2008.
The positive results in December followed solid results in November as well. Again, while most retailers were seeing sales declines, Aeropostale posted a 5% increase in total net sales for the four-week period ending November 29, 2008. Sales rose to $200.9 million, up from $192.2 million for the four-week period ending December 1, 2007.
Aero’s competitive pricing, aggressive email marketing and in-store promotions seem to have been the antidote for an anticipated shopping slump. Competitor Abercrombie & Fitch refused to slash prices in order to stay true to its repertoire and its November total company net sales decreased 24%. Aeropostale reported a 17% increase in year to date total net sales up from $1.192 billion to $1.396 billion. Though the company’s same-store sales dropped 5% in November, it had record-breaking sales and profits in its most recent three-month reporting period.
Just before Thanksgiving, Aero launched an aggressive email marketing initiative. Shoppers were offered 50% off everything and free shipping on orders over $75, for one week only. On the day before Thanksgiving, emails informed customers about their annual Aero bear promo, during which shoppers receive a free small bear with a hundred dollar purchase, or a large bear with a $250 purchase. The bears also decorated brick-and-mortar stores, available for purchase for $24.99.
From Thanksgiving to present, Aero has emailed registered customers almost every day, reinforcing 50-70% discounts on everything and its free shipping for orders over $75. On the 29th, emails cautioned shoppers that its bear stock was running low, creating urgency. Discounts upwards of 40% are common for Aeropostale. They often run 50% everything in-store promotions, which are publicized in email and outside the store. On December 7th, emails warned customers that the 50-70% discount offer was ending. December 11th brought an online exclusive– $10 off all outerwear, including puff vests, coats and jackets.
For the past few weeks, “Aero Monday One Day Deals” offer favorite items at discounted prices, but only on Mondays. Hoodies from $12.99, sweaters from $9.99 and accessories from $4.99 are continued the aggressive pricing strategy.
Optimizing online channel
Aeropostale is capitalizing on the Web 2.0 consumer. Web site visitors can print an “Aero Insider” coupon to redeem $10 off every time you spend $50 or more, and there is no limit to how many times it can be used. While Aero’s demographic is tweens and teens, these promos spoke to parents and adult gift-givers alike. Days before Christmas, the offer was extended for $25 off every time you spend $100 or more. Even after December results were reported, Aeropostale is still pressing a 70% discount online.
“We are very pleased with the record results we generated in the third quarter,” said Julian R. Geiger, chairman and chief executive officer of Aeropostale. “This accomplishment was particularly impressive given the unprecedented weakness in the macroeconomic environment. Our performance demonstrates the strength of our brand and the flexibility and resilience of our business model.”
Aero even nurtured customers during the snowstorm that may have hampered spending on the Saturday before Christmas. An email prompted shoppers to take advantage of the last minute deals and shipping offers even though they might not get out to stores. On the day before Christmas, Aeropostale started a $5 Riot on graphic tees and camis, and a jean sale, where customers can shop all jeans for $19.87, which is also Aero’s year of inception. Though holiday sales fell even more than anticipated in general for retail, Aero seems to be on track. A recent New York Times article said retailers like Aeropostale who offer a niche and cater to teens and young adults are poised for even more growth in the months to come.