Aeropostale Inc the retailer that is currently struggling and has over 1,000 apparel stores for teens and children, announced that Julian Geiger has returned as the CEO. Geiger replaced the outgoing Thomas Johnson.
The board of directors and Johnson agreed he would resign as a director as well as the CEO, said the company on Monday.
Geiger was the CEO at Aeropostale between 1996 and 2010. He was the number one executive at Crumbs Bake Shop the chain of cupcake stores that closed its stores in July, from the latter part of 2011 through the end of 2013.
Shares of Aeropostale were up my 11% during extended trading on Wall Street following the retailer’s announcement.
Johnson was attempting to turn the retailer around after six consecutive quarters of red numbers. In April, the company said it would shutter 125 of its stores focused on kids called P.S., cutting over 100 jobs.
The chain entered into a strategic partnership in March with Sycamore Partners, while receiving a loan for $150 million, as pressure mounted form activist investors for bigger change, including the possibly of selling the business.
One analyst was not completely convinced that Geiger returning would turn the company around. He said for many returning someone who ran the company during its most successful period is a great thing and it will work, but the reality is it will not be that easy.
Aeropostale announced on Monday that its operating loss for the second quarter would be between $36 million and $38 million, which was smaller than it forecasted previously of between $49 million and $54 million. On August 21, the company will announced it full results from the second quarter.
Shares of Aeropostale were up 3.7% late Monday to $3.37 after early increasing to $3.60. The retailer’s stock has slid 64% in 2014 through the end of regular trading on Monday.
Geiger rejoined the board at Aeropostale in May as part of the Sycamore financing pact.
With the capital injection and influence at the board level, Sycamore is not more likely to buyout the retailer in the upcoming three or four quarters.