Shares of Aeropostale Inc. rose Wednesday after investment firm Hirzel Capital Management LLC disclosed that it bought a stake in the teen clothing store chain.
THE SPARK: In a regulatory filing Tuesday, Dallas-based Hirzel Capital said it has taken a 6 percent stake in Aeropostale. The investment firm also said that it plans to have discussions with Aeropostale's management and that the company's shares were "undervalued and represented an attractive investment opportunity."
The stake makes Hirzel the company's fifth-largest shareholder, according to FactSet.
An Aeropostale spokeswoman declined to comment.
THE BIG PICTURE: Shares of Aeropostale have fallen 25 percent over the past year as sales declined for many teen retailers. Young consumers have fickle tastes, are still affected by the weak economy and have limited money to spend on clothes and accessories. Aeropostale, known for putting its logo on its clothing, has been trying to sell trendier clothing.
In August, the company posted a second-quarter loss and issued a weak outlook due to poor sales. Aeropostale's rivals, Abercrombie & Fitch Co. and American Eagle Outfitters Inc., have also struggled to get people into their stores.
SHARE ACTION: Up 53 cents, or 5.6 percent, to close at $10.04 Wednesday. Its shares are down 23 percent for the year.
- Personal Finance - Career & Education