Wall Street Str...'s  Instablog

For all the achievements of Aeropostale Inc. (ARO) CEO Julian Geiger hardly receives the praise that he rightfully deserves from those in the retail sector.  Perhaps it’s because he doesn’t have the flair of a Mickey Drexler or the status of a Ralph Lauren.  Make no mistake, however, Geiger has executed superbly since arriving at Aeropostale in 1996, which at the time was a division of Federated Department Stores (now Macy’s).  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.  His achievements include:

* Helped engineer Aeropostale sale to Bear Stearns
* Helped IPO Aeropostale in 2002; IPO priced at $18.00
* Helped grow annual sales to $1.9 billion in 2008 from $141.0 million in 1998
* Established a place for teens to obtain quality merchandise at prices below the competition
* Spearheaded the very way Aeropostale operates, whether it’s through seasonal promotional strategies to infusing more fashion into the assortments

We aren’t penning Geiger’s eulogy but rather giving him a job well done as he exits the CEO role at year end and stays on as Chairman.  The decision, announced today, was surprising but one we comprehend.  Aeropostale is about to embark on the next chapter in its development, transitioning from a reliance on its namesake U.S. store base to funding international expansion and cultivating a promising children’s division in P.S. from Aeropostale.  Why not hand over the reins to the young guns so to speak.  It’s not like he is leaving the Aeropostale ship to an inexperienced team, quite the contrary.  Mindy Meads (current President/CMO) and Thomas Johnson (EVP/COO), veterans of Aeropostale, will act as CO-CEOs upon Geiger’s exit.  Both have a wealth of retail related knowledge ranging from strategic planning to merchandising.  We ultimately believe the top spot will be won by Meads given her success in elevating the Aeropostale assortments and prior experience at Gymboree (GYMB), which fits well with the upcoming expansion of P.S. from Aeropostale.

Brian Sozzi
Written by Brian Sozzi, a Research Analyst for Wall Street Strategies (www.wstreet.com) specializing in the apparel/hardline goods sectors of the retail industry.  For more information about Mr. Sozzi, refer to the company's website, wstreet.com.