Aeropostale Takes Flight : Macy has joined the crowded specialty retail arena in Southern California.
The gasoline pump at the entrance says this isn’t just any mall store. So does a video monitor embedded in the floor, showing the film “Top Gun.”
Then there’s the big propeller biplane dangling over the cash registers--and the two parachuting mannequins crashing through the corrugated metal ceiling. All over the dark wooden floors, oil drums and shipping crates double as displays for the merchandise--not aviator garb, as one might expect, but moderately priced weekend wear for men and women.
This is the simulated airplane hangar that is Aeropostale, a whimsical new entry into the crowded specialty retail arena in Southern California.
Opened in early April in the Westside Pavilion, the store is owned by R. H. Macy & Co., the veteran New York department store merchant (although the Macy’s name is nowhere to be seen).
Aeropostale’s name and decor are meant to evoke the days more than half a century ago when daring French aviators flew mail routes between northwest Europe, North Africa and South America.
Just as those pilots thrived on adventure, so must Macy’s, to tackle specialty retailing amid the turbulence in the clothing business.
With Aeropostale, the retailer takes to skies that have proven so unfriendly for Banana Republic, the Gap’s high-profile theme chain. But Macy’s officials maintain that they are undaunted, either by rivals’ troubles or by the recent sluggishness in clothing sales.
“This is a whole new avenue for us to pursue,” said Mark S. Handler, Macy’s president. “We’re very pleased with the initial results.”
In addition to Aeropostale, Macy’s has two other fledgling chains, Fantasies by Morgan Taylor, an intimate apparel store, and Charter Club, which sells traditional women’s wear.
All three concepts grew out of labels developed by Macy’s and sold exclusively in its department stores. Macy’s has long been a proponent of such private label merchandise as a way to set itself apart.
“We looked at the specialty store business as an alternative method of distribution after we had had success with our private label program,” Handler said. Macy’s will continue to sell the three specialty labels in its department stores.
Macy’s opened its first concept stores in fall, 1987, and now operates 35 nationwide, ranging from 2,000 to 4,500 square feet; it hopes to have 90 by year-end and to open an additional 50 next year, primarily in strong regional shopping centers.
Other Aeropostale outlets are scheduled to open this year in Del Amo Fashion Center, Sherman Oaks Fashion Square and Topanga Plaza, but Macy’s has not yet nailed down Southern California sites for its other two chains.
The retailer is backing off from early projections about how fast its specialty business will grow. In 1987, Chairman Edward S. Finkelstein was quoted as saying the chains might produce sales of $500 million to $600 million in 1992. (Macy’s has about $7 billion in annual sales companywide.)
“That’s premature,” Handler acknowledged in a recent telephone interview, saying such results would be possible only if “we got into a rollout mode and had 400 stores. With 90 stores, we’ll be of a size and critical mass so that we’ll know a lot more about how fast we can roll them out.”
Others Were Hurt
“A lot will depend on real estate opportunities,” he added.
Given the topsy-turvy nature of specialty retailing, Macy’s might be wise to move cautiously. Highly regarded retailers such as the Limited and the Gap were hurt two years ago when women rejected stale designs and the return of the miniskirt.
Banana Republic, in particular, sank into the doldrums when customers soured on its safari clothes, offered in a jungle-like setting complete with running water, Jeeps and trees. Since then, it has been struggling to reposition itself as a purveyor of comfortable travel clothes.
Handler has wearied of the inevitable comparison with Banana Republic. “I don’t think (our) clothes are that thematic,” he said. “The decor has a strong theme to it, but if you look at the clothes, those will change as fashion or preferences change.”
Even so, Aeropostale, like many retail start-ups, is highly derivative.
The clothes resemble the Gap’s in styling and price. Labels such as Marrakech, Casablanca and Les Cow-Boys de la Camargue are reminiscent of the Limited’s Outback Red and Forenza. The store’s formal name--Compagnie Generale Aeropostale--smacks of the new moniker for a Limited division, Compagnie Internationale Express.
The aviator theme overlaps with that of the Cockpit, a three-store operation with a new outlet in Beverly Hills. But there is a big difference: The Cockpit sells authentic aviator clothing. Although Aeropostale sells leather bomber jackets and jewelry with an airplane theme, most of the merchandise consists of simple shirts, T-shirts, pullover sweaters in pastel colors and full-cut trousers.
“You can split hairs as to whether Aeropostale is a knockoff of Banana Republic,” said Sally Goll, executive editor of Sportswear International, a New York trade publication. “But one thing it has in common is it’s a themed shop based on a trend. . . . When that dies off, they’re stuck with the TV in the floor and the planes.”
There’s little doubt that, for now, the bold visual elements have their allure.
Stuart Smith, a UCLA graduate student shopping one afternoon at Aeropostale, was attracted by the video in the floor, the airplane accouterments and the jazz music playing in the background.
“It’s an interesting gimmick,” he said. “It certainly draws one in.” He left empty-handed, but thought he would return to check out some trousers.
Some retail watchers fear that Macy’s risks a free-fall if the specialty stores take management’s time away from the bread-and-butter business.
Even without the specialty store venture, Macy’s has a full plate, industry observers note. It is still coping with massive debt taken on for a $3.5-billion buyout by management in 1986. Last year, it paid $1.1 billion to add Bullock’s, Bullocks Wilshire and I. Magnin to its stable of stores, and it underwent a corporate reorganization.
Debt payments and lackluster business in the Northeast, Macy’s biggest market, have dragged down earnings for months. The company has recorded huge losses in recent quarters.
“My own opinion is they’ve got enough to do trying to get their own margins up, assimilate Bullock’s and reduce costs from the reorganization,” said Barre W. Littel, an analyst who tracks Macy’s bonds for First Boston Corp., a New York investment firm.
Such views don’t appear to faze Handler as he looks into the wild blue yonder, however. He noted that specialty stores are relatively inexpensive to open ($400,000 for a typical Aeropostale outlet, compared to millions of dollars for a department store) and can move quickly into new markets.
“We’re the first to admit it’s a different business from the department store business,” Handler said. “It’s a business we weren’t in. It has been a very valuable learning experience.”