Zac Hirzel, Hirzel Capital Management Go Activist on Aeropostale

Zac Hirzel‘s Hirzel Capital Management, has slightly increased its exposure at Aeropostale Inc (NYSE:ARO). The fund currently holds around 4.7 million shares of the company, versus 4.5 reported at the end of last week. At the same time, the percentage of the outstanding common stock held by Hirzel edged up to 6.0%, from 5.7%. Another thing that we should mention is that Hirzel has changed the nature of his position from passive to active, which could mean that the fund is planning to get involved in the company’s activity.

Hirzel’s activist intentions are actually revealed in the filing as well. The fund states that it plans to enter into some discussions with Aeropostale’s management. The shares have been bought under the consideration that they are undervalued. Hirzel however does not reveal his plans regarding the company yet, so we should keep our eyes on the story as it is developing.

The stock of apparel retailer Aeropostale has been declining and is down by over 20% since the beginning of the year. The company has not yet provided its financial results for the third quarter, however, in the second quarter, its net sales fell by 6% on the year to $454 million. Aeropostale posted a net loss of $33.7 million in the second quarter, and the forecast for the third quarter does not look very optimistic as well. The company expects a net loss between $0.21 and $0.26 per diluted share, which is a huge slump from a profit of $0.31 per share in the same period of last year.

Among other hedge funds that we track, several disclosed holding shares of Aeropostale. Matt Sirovich and Jeremy Mindich’s Scopia Capital held over 4.9 million shares, according to our database, followed by Patrick Mccormack’s Tiger Consumer Management, and Eminence Capital, managed by Ricky Sandler with 3.6 million shares, and 3.0 million shares respectively.

Disclosure: none

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