September 24, 2009 / 12:36 PM / 10 years ago

UPDATE 3-Aeropostale CEO to step down, executives share duty

* Geiger to stay chairman after stepping down as CEO

* Geiger’s run as CEO will end around end of January

* Shares down 1.7 percent (Recasts, adds details throughout, previous dateline Chicago)

By Alexandria Sage

SAN FRANCISCO, Sept 24 (Reuters) - Teen retailer Aeropostale Inc ARO.N said on Thursday long-serving Chief Executive Julian Geiger would step down from the role at the end of January and be replaced by two company executives.

Geiger, 63, has been CEO since 1996 and will remain chairman of the company. He informed the company he would step down around the end of the current fiscal year, which runs to Jan. 30, the company said.

Mindy Meads, currently Aeropostale’s president and chief merchandising officer, and Thomas Johnson, executive vice president and chief operating officer, will share the position as co-CEOs.

Meads, a well-regarded merchandiser who earlier worked at Limited Brands Inc LTD.N, operator of Victoria’s Secret, was hired by the company in March 2007. Johnson has been with Aeropostale since 2001, but has served in his current role since March 2004.

While in charge, Geiger led Aeropostale from a company whose sales were $140 million in 1998 to one with sales of $1.9 billion in 2008.

Due to a winning combination of more fashionable gear and basics sold through rotating promotions, teens and their budget-conscious mothers have been snatching up Aeropostale clothing in the midst of the recession.

Aeropostale, which was once a division of Federated Department Stores, has also outperformed pricier brands with historically more cachet such as Abercrombie & Fitch Co (ANF.N) and American Eagle Outfitters Inc (AEO.N).

“Geiger took what was, in our view, the odd duck in the teen apparel sector to a prime destination for affordable, on- trend teen wares,” wrote Wall Street Strategies analyst Brian Sozzi in a note.

Sharing the CEO role can be a complicated arrangement that has not always worked to companies’ advantage. A power-sharing arrangement at Kraft Foods Inc KFT.N after the company was spun out from Altria Group Inc (MO.N) in 2001 went awry with one co-CEO, Betsy Holden, eventually being demoted and later leaving the company.

At Citigroup, a co-sharing deal between John Reed and Sanford Weill eventually fizzled and at Martha Stewart Living Omnimedia Inc MSO.N, a similar arrangement lasted less than a year.

But analyst Sozzi said the deal appeared to make sense at Aeropostale, which is beginning to eye international expansion and recently launched a brand for kids, P.S. from Aeropostale.

“Why not hand over the reins to the young guns, so to speak,” wrote Sozzi. “It’s not like he is leaving the Aeropostale ship to an inexperienced team, quite the contrary.”

The company also said Michael Cunningham will move up to president from executive vice president when Geiger leaves, while remaining chief financial officer.

Aeropostale shares have risen more than 800 percent since the beginning of 2003. The shares are up 166 percent alone this year. On Thursday, shares fell 1.7 percent, compared with a 1 percent drop for the Standard & Poor’s Retail Index .RLX. (Reporting by Alexandria Sage; additional reporting by Ben Klayman; editing by Gerald E. McCormick, Lisa Von Ahn and Andre Grenon)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below