10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 1, 2014
OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-31314

Aéropostale, Inc.

(Exact name of registrant as specified in its charter)

Delaware	31-1443880
(State of incorporation)	(I.R.S. Employer Identification No.)
112 W. 34th Street, New York, NY	10120
(Address of Principal Executive Offices)	(Zip Code)

(646) 485-5410

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting
		(Do not check if a smaller reporting company)	company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨     No þ

The Registrant had 79,122,539 shares of common stock outstanding as of December 4, 2014.

AÉROPOSTALE, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4	Controls and Procedures	36
PART II	OTHER INFORMATION	36
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults Upon Senior Securities	37
Item 4	Mine Safety Disclosures	37
Item 5	Other Information	37
Item 6	Exhibits	38
SIGNATURES		39

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PART I — FINANCIAL INFORMATION

Item 1.  Financial Statements

AÉROPOSTALE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

	November 1, 2014			February 1, 2014			November 2, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	109,198		$	106,517		$	68,018
Merchandise inventory	211,136			172,311			262,587
Income taxes receivable	9,198			50,388			42,021
Prepaid expenses and other current assets	47,958			47,405			60,552
Total current assets	377,490			376,621			433,178
Fixtures, equipment and improvements, net	151,196			235,401			274,402
Goodwill	13,919			13,919			13,919
Intangible assets, net	14,097			14,661			14,849
Other assets	21,622			7,039			5,965
TOTAL ASSETS	$	578,324		$	647,641		$	742,313
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	143,354		$	138,245		$	179,821
Accrued expenses and other current liabilities	99,319			102,116			86,644
Total current liabilities	242,673			240,361			266,465
Indebtedness to related party - non-current (See Note 3)	136,042			—			—
Other non-current liabilities	95,766			126,588			128,981
Commitments and contingent liabilities (See Notes 3, 5, 10, 11, 12 and 13)
Stockholders’ Equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; 1; 0 and 0 shares issued or outstanding	—			—			—
Common stock, $0.01 par value; 200,000 shares authorized; 79,568; 78,616 and 78,608 shares issued	796			786			786
Additional paid-in capital	244,910			231,202			225,843
Accumulated other comprehensive loss	2,640			(1,183		)	20
Accumulated (deficit) earnings	(141,431		)	51,493			121,799
Treasury stock 472; 118 and 114 shares, at cost	(3,072		)	(1,606		)	(1,581		)
Total stockholders’ equity	103,843			280,692			346,867
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	578,324		$	647,641		$	742,313

See Notes to Unaudited Condensed Consolidated Financial Statements

3

AÉROPOSTALE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Net sales	$	452,889		$	514,588		$	1,244,902		$	1,420,895
Cost of sales (includes certain buying, occupancy and warehousing expenses)	384,011			426,699			1,042,977			1,150,400
Gross profit	68,878			87,889			201,925			270,495
Selling, general and administrative expenses	121,250			128,923			361,877			375,827
Restructuring charges	1,713			—			39,221			—
Loss from operations	(54,085		)	(41,034		)	(199,173		)	(105,332		)
Interest expense 1	3,035			314			5,808			705
Loss before income taxes	(57,120		)	(41,348		)	(204,981		)	(106,037		)
Income tax benefit	(4,797		)	(15,725		)	(12,057		)	(34,512		)
Net loss	$	(52,323	)	$	(25,623	)	$	(192,924	)	$	(71,525	)
Basic loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)
Diluted loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)
Weighted average basic shares	79,015			78,488			78,775			78,442
Weighted average diluted shares	79,015			78,488			78,775			78,442

¹ Includes interest expense to related party of $2.7 million during the third quarter of 2014 and $4.8 million for the first thirty-nine weeks of 2014.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Net loss	$	(52,323	)	$	(25,623	)	$	(192,924	)	$	(71,525	)
Other comprehensive income (loss):
Pension liability, net of income taxes of $0, $561, $0 and $645, respectively	3,658			840			3,758			968
Foreign currency translation adjustment (See Note 6)	(31		)	(64		)	65			(1,138		)
Other comprehensive income (loss)	$	3,627		$	776		$	3,823		$	(170	)
Comprehensive loss	$	(48,696	)	$	(24,847	)	$	(189,101	)	$	(71,695	)

See Notes to Unaudited Condensed Consolidated Financial Statements

4

AÉROPOSTALE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	39 weeks ended
	November 1, 2014			November 2, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(192,924	)	$	(71,525	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	39,388			47,281
Asset impairment charges	64,612			13,624
Amortization of intangible assets	564			564
Stock-based compensation	11,495			11,857
Other	(1,325		)	(4,733		)
Changes in operating assets and liabilities:
Merchandise inventory	(39,013		)	(107,564		)
Income taxes receivable and other assets	29,604			(48,302		)
Accounts payable	5,136			90,030
Accrued expenses and other liabilities	(19,090		)	(24,723		)
Net cash used in operating activities	$	(101,553	)	$	(93,491	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(21,127		)	(68,013		)
Change in restricted cash	(2,210		)	—
Final working capital adjustment related to the acquisition of GoJane.com, Inc.	—			(381		)
Net cash used in investing activities	$	(23,337	)	$	(68,394	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	—			219
Net proceeds from financing transaction with related party	137,648			—
Borrowings under revolving credit facility	75,500			—
Repayments under revolving credit facility	(75,500		)	—
Fees related to financing transaction with related party	(6,165		)	—
GoJane contingent consideration payment	(1,531		)	—
Financing fees related to revolving credit facility	(687		)	—
Purchase of treasury stock	(1,466		)	(1,581		)
Net cash provided by (used in) financing activities	$	127,799		$	(1,362	)
Effect of exchange rate changes	$	(228	)	$	(236	)
Net increase (decrease) in cash and cash equivalents	2,681			(163,483		)
Cash and cash equivalents, beginning of year	106,517			231,501
Cash and cash equivalents, end of period	$	109,198		$	68,018

See Notes to Unaudited Condensed Consolidated Financial Statements

5

AÉROPOSTALE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  Description of Business

Aéropostale, Inc. and its subsidiaries (“we”, “us”, “our”, the “Company” or “Aéropostale”) is a primarily mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men through its Aéropostale stores and 4 to 12 year-olds through its P.S. from Aéropostale stores.  We provide customers with a focused selection of high quality fashion and fashion basic merchandise at compelling values in an exciting and customer friendly store environment.  Aéropostale maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise.  Aéropostale products can be purchased in Aéropostale stores and online at www.aeropostale.com (this and any other references in this Quarterly Report on Form 10-Q to www.aeropostale.com or www.ps4u.com are solely references to a uniform resource locator, or URL, and are inactive textual references only, not intended to incorporate the websites into this Quarterly Report on Form 10-Q).  P.S. from Aéropostale products can be purchased in P.S. from Aéropostale stores, certain Aéropostale stores and online at www.ps4u.com.  As of November 1, 2014, we operated 911 Aéropostale stores, consisting of 842 stores in all 50 states and Puerto Rico, 69 stores in Canada, as well as 141 P.S. from Aéropostale stores in 32 states and Puerto Rico. Since November 2012, our Company acquired and now operates GoJane.com, Inc. (“GoJane”), an online women's fashion footwear and apparel retailer. In addition, pursuant to various licensing agreements, our licensees operated 220 Aéropostale locations and one Aéropostale and P.S. from Aéropostale combination location in the Middle East, Asia, Europe and Latin America as of November 1, 2014. We recently signed licensing agreements in Chile for both Aéropostale and P.S. from Aéropostale locations. Additionally, we recently signed a licensing agreement in Mexico that will allow our licensee to operate P.S. from Aéropostale locations.

2.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America. However, in the opinion of our management, all adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist primarily of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may materially differ from these estimates.

Our business is highly seasonal, and historically, we have realized a significant portion of our sales and cash flows in the second half of the year, attributable to the impact of the back-to-school selling season in the third quarter and the holiday selling season in the fourth quarter.  As a result, our working capital requirements fluctuate during the year, increasing in mid-summer in anticipation of the third and fourth quarters. Our business is also subject, at certain times, to calendar shifts which may occur during key selling times such as school holidays, Easter and regional fluctuations in the calendar during the back-to-school selling season. Therefore, our interim period unaudited condensed consolidated financial statements may not be indicative of our full-year results of operations, financial condition or cash flows.  These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for our fiscal year ended February 1, 2014 (“Fiscal 2013 10-K”).

References to “2014” or “fiscal 2014” mean the 52-week period ending January 31, 2015 and references to “2013” or “fiscal 2013” mean the 52-week period ended February 1, 2014.  References to “the third quarter of 2014” mean the thirteen-week period ended November 1, 2014 and references to “the third quarter of 2013” mean the thirteen-week period ended November 2, 2013.

3.  Closing of $150.0 Million Financing Transaction

On May 23, 2014, we entered into (i) a Loan and Security Agreement (the "Loan Agreement") with affiliates of Sycamore Partners, (ii) a Stock Purchase Agreement (the "Stock Purchase Agreement") with Aero Investors LLC, an affiliate of Sycamore Partners for the purchase of 1,000 shares of Series B Convertible Preferred Stock of the Company, $0.01 par value (the "Series B Preferred Stock"), and (iii) an Investor Rights Agreement with Sycamore Partners.

The Loan Agreement made available to us term loans in the principal amount of $150.0 million, consisting of two tranches: a five-year $100.0 million term loan facility (the "Tranche A Loan") and a 10-year $50.0 million term loan facility (the "Tranche B Loan" and, together with the Tranche A Loan, the "Term Loans").

Simultaneously with entering into the Loan Agreement, we amended our existing revolving credit facility with Bank of America, N.A. to allow for the incurrence of the additional debt under the Loan Agreement.

6

Sycamore Partners is considered a related party due to its ownership interest in us. As of May 23, 2014, Sycamore Partners owned approximately 8% of our outstanding common stock. Stefan Kaluzny, a managing director at Sycamore Partners, had joined our Board of Directors upon the closing of this transaction. In addition to Mr. Kaluzny, Sycamore Partners had received the right to appoint one additional member to our Board, and appointed Julian R. Geiger, who subsequently agreed to become our CEO on August 18, 2014. Additionally a third independent appointee was mutually agreed upon by Sycamore Partners and us.

The accounting guidance related to multiple deliverables in an arrangement provides direction on determining if separate contracts should be evaluated as a single arrangement and if an arrangement involves a single unit of accounting or separate units of accounting. We determined that there were four units of accounting or elements of the arrangement which included Tranche A Loan, Tranche B Loan, Series B convertible preferred stock and the Sourcing Agreement (as hereinafter defined). We allocated the initial value based on the relative fair values of each element in the transaction. We estimated the fair values of Tranche A Loan and Tranche B Loan using the discounted cash flow method. Under this method, the projected interest and principal payments are projected through the life of each loan. These cash flows are then discounted to the present value at an appropriate market-derived discount rate, taking into account market yields at the date of issuance and an assessment of the credit rating applicable to us based on the consideration of various credit metrics along with the terms of each loan (such as duration, coupon rate, etc.) to derive an indication of fair value. These instruments are classified as a Level 3 measurement, as they are not publicly traded and we are therefore unable to obtain quoted market prices. The Series B Preferred Stock represents a convertible security that can be exchanged for shares of Company common stock upon the payment of a cash conversion price of $7.25 per common share equivalent.  Effectively, the Series B Preferred Stock has the characteristic of a warrant as each share represents an option to purchase 3,932.018 shares of common stock at an exercise price of $7.25 per common share, and there is no dividend or liquidation preference associated with the Series B Preferred Stock. Accordingly, the Black-Scholes model was used to determine the fair value of the Convertible Shares with an expected life of 10 years, a risk free interest rate of 2.54%, and expected volatility of 50%. The Sourcing Agreement was determined to be at fair value and therefore no proceeds were allocated to the agreement.

On May 23, 2014, the Term Loans were disbursed in full and we received net proceeds of $137.6 million from an affiliate of Sycamore Partners, after deducting the first year interest payment and certain issuance fees.

Loan Agreement

The Tranche A Loan bears interest at an interest rate equal to 10% per annum and, at our election, up to 50% of the interest can be payable-in-kind during the first three years and up to 20% of the interest can be payable-in-kind during the final two years. The first year of interest under the Tranche A Facility in the amount of $10.0 million was prepaid in cash in full on May 23, 2014, and no other interest payments are required to be paid during the first year of the Tranche A Loan. The Tranche A Loan has no annual scheduled repayment requirements. The Tranche A Loan is scheduled to mature on May 23, 2019. The Tranche B Loan will not accrue any interest. The Tranche B Loan has no stated interest rate and will be repaid in equal annual installments of 10% per annum. The Tranche B Loan is scheduled to mature on the earlier of (a) tenth anniversary of the end of the Start-Up Period (as such term is defined in the Sourcing Agreement) and (b) the expiration or termination of the Sourcing Agreement described below.

The Term Loans are guaranteed by certain of our domestic subsidiaries and secured by a second priority security interest in all assets of the Company and certain of our subsidiaries that were already pledged for the benefit of Bank of America, N.A., as agent, under its existing revolving credit facility, and a first priority security interest in our, and certain of our subsidiaries', remaining assets.

The Loan Agreement contains representations, covenants and events of default that are substantially consistent with our existing revolving credit facility with Bank of America, N.A. The Loan Agreement also contains a $70.0 million minimum liquidity covenant. The Company was in compliance with the minimum liquidity covenant and other covenants under the Loan Agreements at November 1, 2014.

The proceeds of the Term Loans are to be used for working capital and other general corporate purposes. Prepayment of the Tranche A Loan will require payment of a premium of 10% of the principal amount prepaid on or before the one year anniversary of the closing, and 5% of the principal amount prepaid on or before the second anniversary of the closing. There is no prepayment penalty after the second anniversary of the closing. The Tranche B Loan may be prepaid at any time without premium or penalty.

We recorded liabilities for the Term Loans using imputed interest based on our best estimate of its incremental borrowing rates. The effective interest rate used for Tranche A Loan was 7.19%, resulting in an initial present value of $101.7 million and a resulting debt premium of $1.7 million. The premium is being amortized to interest expense over the expected term of the debt using the effective interest method. The effective interest rate for Tranche B Loan used was 7.86%, resulting in an initial present value of $30.0 million and a debt discount of $20.0 million, which is also being amortized to interest expense over the expected term of the

7

debt. Additionally, we recorded deferred financing fees of $5.9 million related to the Term Loans which are being amortized to interest expense over the expected terms of the debt.

We had fair values of $136.0 million in borrowings outstanding under the Loan Agreement, with face value of $150.0 million, as of November 1, 2014. Fair value outstanding for Tranche A Loan was $105.0 million, with a face value of $100.0 million. Fair value outstanding for Tranche B Loan was $31.0 million, with a face value of $50.0 million. Fair values approximate carrying values. Total interest and fees expense associated with this transaction was $2.7 million for the third quarter of 2014 and $4.8 million for the first thirty-nine weeks of 2014.

Series B Convertible Preferred Stock

Concurrent with, and as a condition to, entering into the Loan Agreement, we issued 1,000 shares of the Series B Preferred Stock to Investor at an aggregate offer price of $100,000. Each share of Series B Preferred Stock is convertible at any time at the option of the holder on or prior to May 23, 2024 into shares of common stock at an initial conversion rate of 3,932.018 for each share of Series B Preferred Stock. The common stock underlying the Series B Preferred Stock represents 5% of our issued and outstanding common stock as of May 23, 2014. The Series B Preferred Stock is convertible into shares of the common stock at an initial cash conversion price of $7.25 per share of the underlying common stock. The number of shares of Series B Preferred Stock or common stock to be issued upon exercise and the respective exercise prices are subject to adjustment for changes in the Series B Preferred Stock or common stock, such as stock dividends, stock splits, and similar changes. In the event of a change of control transaction, the Series B Preferred Stock will automatically convert into common stock subject to payment by the holder of such Series B Preferred of the aggregate cash conversion price then in effect, if such conversion price is lower than the per share consideration to be received in the change of control transaction. If the per share consideration to be received in the change of control transaction is less than or equal to the per share cash conversion price then in effect, the Series B Preferred will be automatically converted into a right to receive an amount per share equal to the par value of such share of Series B Preferred Stock.

We analyzed the embedded conversion option for derivative accounting consideration under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 815-15, “Derivatives and Hedging” and determined that the conversion option should be classified as equity. We also analyzed the conversion option for beneficial conversion features consideration under ASC Subtopic 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. The Series B Preferred Stock was recorded in equity at a fair value of $5.9 million upon issuance, and was not recorded as a liability on the consolidated balance sheet.

Non-Exclusive Sourcing Agreement

As a condition to funding the Tranche B Loan, we and one of our subsidiaries also entered into a non-exclusive Sourcing Agreement (the "Sourcing Agreement") with TSAM (Delaware) LLC (d/b/a MGF Sourcing US LLC), an affiliate of Sycamore Partners ("MGF"). The price of merchandise sold to us by MGF pursuant to the Sourcing Agreement is required to be competitive to market. We expect to commence sourcing goods with MGF pursuant to the Sourcing Agreement during the fourth quarter of 2014.

We guarantee the obligations of our subsidiary under the Sourcing Agreement. The Sourcing Agreement requires us to purchase a minimum volume of product for a period of 10 years commencing on our first fiscal quarter of 2016 (such period, the "Minimum Volume Commitment Period"), of between $240.0 million and $280.0 million per annum depending on the year (the "Minimum Volume Commitment"). If we fail to purchase the applicable Minimum Volume Commitment in any given year, we will pay a shortfall commission to MGF, based on a scaled percentage of the applicable Minimum Volume Commitment shortfall during the applicable period.

Under the Sourcing Agreement, MGF is required to pay to us an annual rebate equal to a fixed amount multiplied by the percentage of annual purchases made by us (including purchases deemed to be made by virtue of payment of the shortfall commission) relative to the Minimum Volume Commitment to be applied towards the payment of the required amortization on the Tranche B Loan. The Sourcing Agreement also provides for certain carryover credits if we purchase a volume of product above the Minimum Volume Commitment during the applicable Minimum Volume Commitment Period.

We may terminate the Sourcing Agreement upon nine (9) months' notice at any time after the first three years of the Minimum Volume Commitment Period have elapsed, subject to payment of a termination fee scaled to the term remaining under the Sourcing Agreement.

8

4.  Restructuring Program

On April 30, 2014, following an assessment of changing consumer patterns, management and the Board of Directors approved a comprehensive plan to restructure the P.S. from Aéropostale business and to reduce costs. We plan to close approximately 125 mall-based P.S. from Aéropostale stores and streamline and improve the Company's expense structure. We plan to focus on sales channels with higher expectations for growth, including off-mall locations (including outlets), e-commerce and international licensing of P.S. from Aéropostale. We anticipate that substantially all of the planned store closures will be completed on or around the end of fiscal 2014. As of November 1, 2014, 11 mall-based P.S. from Aéropostale stores have been closed. The cost reduction program will also target direct and indirect spending across the organization. This has included the reduction of corporate headcount by eliminating approximately 100 open or occupied positions to align with our current business strategies.

We estimate that we will incur pre-tax restructuring and impairment charges related to these actions totaling approximately $40.0 million to $65.0 million throughout fiscal 2014, of which approximately $25.0 million to $40.0 million are estimated to be cash expenses. Included in the estimate of total pre-tax charges are approximately:

• $5.5 million of consulting and severance expenses resulting from the announced corporate cost reduction initiatives, of which $0.4 million were recorded during the third quarter of 2014 and $5.1 millionduring the firstthirty-nine weeks of 2014.

• $30.5 million of store asset impairments resulting primarily from the expected closures of the P.S. from Aéropostale stores, all of which were recorded during the first quarter of 2014.

• $4.0 million of additional severance resulting from the store closures, of which $1.2 million was recorded during the third quarter of 2014 and $2.5 million for the first thirty-nine weeks of 2014. These costs are expected to be recorded through the remainder of fiscal 2014 until the stores are closed.

• The remainder of the charges relate to estimated lease costs in connection with the store closures, which are expected to be recorded during the remainder of fiscal 2014. We expect to pay significantly all lease costs during the fourth quarter of 2014 and first quarter of 2015.

The charges are recognized in restructuring charges in the statement of operations.

The following is a summary of expenses incurred during the third quarter of 2014 and the first thirty-nine weeks of 2014 associated with the above ongoing actions:

	13 weeks ended		39 weeks ended
	November 1, 2014
	(In thousands)
Severance	$	1,236	$	3,749
Lease costs	146		1,198
Impairment	—		30,497
Other exit costs	331		3,777
Total	$	1,713	$	39,221

The Company accrued liabilities for the above mentioned restructuring charges as of November 1, 2014, which are expected to be paid during fiscal 2014 as follows:

	Impairments			Severance			Lease Costs			Other Exit Costs			Total
	(In thousands)
Liability/Charge at Program Inception	$	30,497		$	1,060		$	1,046		$	1,886		$	34,489
Additions	—			2,689			152			1,891			4,732
Paid or Utilized	(30,497		)	(1,435		)	(315		)	(3,754		)	(36,001		)
Adjustments	—			—			—			—			—
Liability as of November 1, 2014	$	—		$	2,314		$	883		$	23		$	3,220

Of the above liabilities, $2.7 million is recorded in accrued expenses and other current liabilities and the balance is included in non-current liabilities.

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5.  Fair Value Measurements

We follow the guidance in ASC Topic 820, “Fair Value Measurement” (“ASC 820”) as it relates to financial and nonfinancial assets and liabilities. ASC 820 prioritizes inputs used in measuring fair value into a hierarchy of three levels:

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available.

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:

	Level 1						Level 2						Level 3
	November 1, 2014		February 1, 2014		November 2, 2013		November 1, 2014		February 1, 2014		November 2, 2013		November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Assets:
Cash equivalents 1	$	80,005	$	82,378	$	36,265	$	—	$	—	$	—	$	—	$	—	$	—
Total	$	80,005	$	82,378	$	36,265	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities:
GoJane performance plan liability 2	$	—	$	—	$	—	$	—	$	—	$	—	$	5,915	$	7,416	$	7,350
Exit costs obligation 3	—		—		—		—		—		—		2,889		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	8,804	$	7,416	$	7,350

¹ Cash and cash equivalents include money market investments valued as Level 1 inputs in the fair value hierarchy. The fair value of cash and cash equivalents approximates their carrying value due to their short-term maturities.

² Under the terms of the fiscal 2012 GoJane acquisition agreement, the purchase price also includes contingent cash payments of up to an aggregate of $8.0 million if certain financial metrics are achieved by the GoJane business during the five year period beginning on the acquisition date (the "GJ Performance Plan"). These performance payments are not contingent upon continuous employment by the two individual stockholders. The GJ Performance Plan liability is measured at fair value using Level 3 inputs as defined in the fair value hierarchy. The fair value of the contingent payments as of the acquisition date was estimated to be $7.0 million. This was based on a weighted average expected achievement probability and a discount rate over the expected payment stream. Each quarter, we remeasure the GJ Performance Plan liability at fair value.

³ In accordance with the lease assignment for the 34th Street store, we placed $2.4 million in escrow for payment of real estate taxes. We recorded an exit cost obligation related to the real estate taxes at fair value of $2.0 million on the cease-use date. Additionally, the above exit costs obligation includes $1.0 million of lease costs related to four P.S. from Aéropostale stores with previously executed leases that will not open in connection with our restructuring program. These exit cost liabilities are measured at fair value using Level 3 inputs as defined in the fair value hierarchy. This was based on a discount rate over the expected payment streams. Each quarter we remeasure these liabilities at fair value.

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The following table provides a reconciliation of the beginning and ending balances of the GJ Performance Plan measured at fair value using significant unobservable inputs (Level 3):

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Balance at beginning of period	$	7,416		$	7,019
Accretion of interest expense	99			331
GoJane consideration payment	(1,600		)	—
Balance at end of period	$	5,915		$	7,350

The $5.9 million liability as of November 1, 2014 was included in non-current liabilities. Of the $7.4 million liability as of November 2, 2013, $1.6 million was included in accrued expenses and other current liabilities and the balance was included in non-current liabilities.

The following table provides a reconciliation of the beginning and ending balances of the Exit Cost Obligations measured at fair value using significant unobservable inputs (Level 3):

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Balance at beginning of period	$	—		$	—
Fair value of exit costs obligations at cease-use date	3,009			—
Accretion of rent expense	245			—
Payments	(365		)	—
Balance at end of period	$	2,889		$	—

Of the $2.9 million liability as of November 1, 2014, $0.8 million was included in accrued expenses and other current liabilities and the balance was included in non-current liabilities.

Non-Financial Assets

Our non-financial assets, which include fixtures, equipment and improvements and intangible assets, are not required to be measured at fair value on a recurring basis.  However, if certain triggering events occur, or if an impairment test is required and we are required to evaluate the non-financial asset for impairment, a resulting asset impairment would require that the non-financial asset be recorded at a new cost based on its measured fair value.  

We recorded asset impairment charges, all of which was included in the cost of sales, of approximately $12.5 million during the third quarter of 2014 primarily for 59 stores. We recorded asset impairment charges of approximately $64.6 million during the first thirty-nine weeks of 2014 for primarily 277 stores. Of these charges, $34.1 million was included in cost of sales. The remaining $30.5 million was included in restructuring charges, as it related to the P.S. from Aéropostale stores to be exited. We recorded store asset impairment charges of approximately $5.1 million during the third quarter of 2013 for primarily 25 stores and $13.6 million during the first thirty-nine weeks of 2013 for primarily 72 stores. These charges were included in cost of sales.  These amounts included the write-down of long-lived assets at stores that were assessed for impairment because of (a) changes in circumstances that indicated the carrying value of assets may not be recoverable, or (b) management’s intention to relocate or close stores.  Impairment charges were primarily related to revenues and/or gross margins not meeting targeted levels at the respective stores as a result of macroeconomic conditions, location related conditions and other factors that are negatively impacting the sales and cash flows of these locations.

Long-lived assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 3 inputs as defined in the fair value hierarchy.  The fair value of long-lived assets is determined by estimating the amount and timing of net future discounted cash flows.  We estimate future cash flows based on our experience, current trends and local market conditions. Based upon future results of operations at the store level, additional impairment charges may be recorded in future periods if loss trends continue and/or the current cash flow projections are not achieved.

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The table below sets forth by level within the fair value hierarchy the fair value of long-lived assets for which impairment was recognized for the first thirty-nine weeks of 2014 and the first thirty-nine weeks of 2013:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Total Losses
	(In thousands)
November 1, 2014:
Long-lived assets held and used	$	—	$	—	$	6,488	$	6,488	$	64,611
November 2, 2013:
Long-lived assets held and used	$	—	$	—	$	5,431	$	5,431	$	13,624

6.  Stockholders’ Equity

Stockholders Rights Plan

On November 26, 2013, we entered into a Rights Agreement with American Stock Transfer & Trust Company, LLC (the “Rights Agreement”), pursuant to which the Company, among other things, issued one right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, of the Company (the “Rights Plan”). By its terms, the Rights Plan provided that, among other things, the Rights would expire upon the close of business on the earliest to occur of: (i) November 26, 2014, (ii) the date on which the rights are redeemed or exchanged by the Company in accordance with the Rights Agreement and (iii) the date of the Company’s 2014 annual meeting of stockholders if requisite stockholder approval of the Rights Agreement is not obtained at such meeting. The Board determined not to seek stockholder approval of the Rights Plan at the 2014 Annual Meeting which occurred on June 30, 2014. Consequently, pursuant to the terms of the Rights Plan, and without any further action, as of the date of the Annual Meeting, the right to exercise the Rights terminated, each Right is null and void and the Rights Plan expired.

Stock Repurchase Program

We have the ability to repurchase our common stock under a stock repurchase program, which was announced on December 9, 2003. The repurchase program may be modified or terminated by the Board of Directors at any time and there is no expiration date for the program. The extent and timing of repurchases will depend upon general business and market conditions, stock prices, opening and closing of the stock trading window, and liquidity and capital resource requirements going forward.

We did not repurchase shares of our common stock during the first thirty-nine weeks of 2014 or 2013 under the stock repurchase program.  We have repurchased 60.1 million shares of our common stock for $1.0 billion under the program to date.  As of November 1, 2014, we have approximately $104.4 million of repurchase authorization remaining under our $1.15 billion share repurchase program.

In addition to the above program, we withheld 354,000 shares for minimum statutory withholding taxes of $1.5 million related to the vesting of stock awards during the first thirty-nine weeks of 2014.

Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

	November 1, 2014		February 1, 2014			November 2, 2013
	(In thousands)
Pension liability, net of tax	$	1,751	$	(2,007	)	$	(1,573	)
Cumulative foreign currency translation adjustment 1	889		824			1,593
Total accumulated other comprehensive loss	$	2,640	$	(1,183	)	$	20

¹ Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in our subsidiary in Canada.

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The changes in components in accumulated other comprehensive (loss) income are as follows:

	39 weeks ended
	November 1, 2014
	Pension Liability			Foreign Currency Translation		Total
	(In thousands)
Beginning balance at February 2, 2014	$	(2,007	)	$	824	$	(1,183	)
Other comprehensive income before reclassifications	—			65		65
Reclassified from accumulated other comprehensive income	3,758			—		3,758
Tax effect on pension liability	—			—		—
Net current-period other comprehensive income	$	3,758		$	65	$	3,823
Ending balance at November 1, 2014	$	1,751		$	889	$	2,640

	39 weeks ended
	November 2, 2013
	Pension Liability			Foreign Currency Translation			Total
	(In thousands)
Beginning balance at February 3, 2013	$	(2,541	)	$	2,731		$	190
Other comprehensive loss before reclassifications	—			(1,138		)	(1,138		)
Reclassified from accumulated other comprehensive income	1,613			—			1,613
Tax effect on pension liability	(645		)	—			(645		)
Net current-period other comprehensive income (loss)	$	968		$	(1,138	)	$	(170	)
Ending balance at November 2, 2013	$	(1,573	)	$	1,593		$	20

The details related to the reclassifications out of accumulated comprehensive loss are as follows:

	13 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Amortization of defined benefit plan items:
Net gain	$	3,633	1	$	739		1
Amortization of loss	$	6	1	68			1
Amortization of prior service cost	18		1	18			1
Settlement loss	—		1	577			1
Total before tax	$	3,657		$	1,402
Tax expense	—			(561		)
Net of tax	$	3,657		$	841

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	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Amortization of defined benefit plan items:
Net gain	$	3,633	1	$	739		1
Amortization of loss	69		1	241			1
Amortization of prior service cost	56		1	56			1
Settlement loss	—		1	577			1
Total before tax	$	3,758		$	1,613
Tax expense	—			(645		)
Net of tax	$	3,758		$	968

¹ These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost (see Note 11).

7.  Loss Per Share

The following table sets forth the computations of basic and diluted loss per share:

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
	(In thousands, except per share data)
Net loss	$	(52,323	)	$	(25,623	)	$	(192,924	)	$	(71,525	)
Weighted average basic shares	79,015			78,488			78,775			78,442
Impact of dilutive securities	—			—			—			—
Weighted average diluted shares	79,015			78,488			78,775			78,442
Basic loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)
Diluted loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)

All options to purchase shares, in addition to restricted, performance shares and convertible preferred shares, were excluded from the computation of diluted loss per share because the effect would be anti-dilutive during fiscal 2014 and fiscal 2013.

8.  Accrued Expensesand Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Accrued gift cards	$	17,030	$	27,783	$	21,076
Accrued compensation and retirement benefit plan liabilities	22,014		16,939		10,928
Current portion of tenant allowances	14,057		—		—
Other	46,218		57,394		54,640
Total accrued expenses and other current liabilities	$	99,319	$	102,116	$	86,644

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9.  Other Non-current Liabilities

Other non-current liabilities consist of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Deferred rent	$	43,685	$	46,831	$	47,153
Deferred tenant allowance	29,515		51,189		54,613
Retirement benefit plan liabilities	5,841		14,339		14,172
Uncertain tax contingency liabilities	2,075		3,702		3,343
Other	14,650		10,527		9,700
Total other non-current liabilities	$	95,766	$	126,588	$	128,981

10.  Revolving Credit Facility

In September 2011, we entered into an amended and restated revolving credit facility with Bank of America, N.A. (the “Credit Facility”). The Credit Facility originally provided for a revolving credit line up to $175.0 million. The Credit Facility is available for working capital and general corporate purposes. The Credit Facility is scheduled to expire on September 22, 2016, and is guaranteed by all of our domestic subsidiaries (the “Guarantors”). No amounts were outstanding during fiscal 2013 or as of November 1, 2014 under the Credit Facility. During the first twenty-six weeks of 2014, we borrowed and repaid $75.5 million. During the third quarter of 2014, we had no borrowings. Management has no reason at this time to believe that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the Credit Agreement in the event of our election to draw funds in the foreseeable future.

On February 21, 2014, the Company, certain of its direct and indirect subsidiaries, including GoJane LLC, the Lenders party thereto, and Bank of America, N.A., as agent for the ratable benefit of the Credit Parties (in such capacity, the “Agent”), entered into a Joinder and First Amendment to Third Amended and Restated Loan and Security Agreement and Amendment to Certain Other Loan Documents (the “First Amendment”). The First Amendment amended the Credit Facility, among other things, to increase from $175.0 million to $230.0 million the aggregate amount of loans and other extensions of credit available to the Borrower under the Credit Facility by (i) the addition of a $30.0 million first-in, last-out revolving loan facility based on the appraised value of certain intellectual property of the Company, and (ii) an increase in the Company’s existing revolving credit facility by $25.0 million, from $175.0 million to $200.0 million (which continues to include a $40.0 million sublimit for the issuance of letters of credit). In addition, the accordion feature of the Credit Facility, under which the Company may request an increase in the commitments of the Lenders thereunder from time to time, was reduced from $75.0 million to $50.0 million. GoJane LLC, an indirect wholly-owned subsidiary of the Company, also joined the Credit Facility as a new guarantor.

On May 23, 2014, we entered into $150.0 million senior secured credit facilities with Sycamore Partners. In connection with this agreement, we amended the revolving credit facility with Bank of America N.A. to allow for the incurrence of this additional debt under the Loan Agreement (see Note 3).

Loans under the Credit Facility are secured by substantially all of our assets and are guaranteed by the Guarantors. Upon the occurrence of a Suspension Event (which is defined in the Credit Facility as an event of default or any occurrence, circumstance or state of facts which would become an event of default after notice, or lapse of time, or both) or, in certain circumstances, a Cash Dominion Event (which is defined in the Credit Facility as either any event of default or failure to maintain availability in an amount greater than 12.5% of the lesser of the borrowing base and facility commitment), our ability to borrow funds, make investments, pay dividends and repurchase shares of our common stock may be limited, among other limitations. Direct borrowings under the Credit Facility bear interest at a margin over either LIBOR or at the Prime Rate (as each such term is defined in the Credit Facility).

The Credit Facility also contains covenants that, subject to specified exceptions, restrict our ability to, among other things:

• incur additional debt or encumber assets of the Company;

• merge with or acquire other companies, liquidate or dissolve;

• sell, transfer, lease or dispose of assets; and

• make loans or guarantees.

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Events of default under the Credit Facility include, but not limited to, and subject to grace periods and notice provisions in certain circumstances, failure to pay principal amounts when due, breaches of covenants, misrepresentation, default on leases or other indebtedness, excess uninsured casualty loss, excess uninsured judgment or restraint of business, failure to maintain specified availability levels, business failure or application for bankruptcy, legal challenges to loan documents and a change in control. Upon the occurrence of an event of default under the Credit Facility, the Lenders may take action, including but not limited to, cease making loans, termination of the Credit Facility and declaration that all amounts outstanding are immediately due and payable, and taking possession of and selling all assets that have been used as collateral. 

The Company is subject to a restriction requiring the maintenance of minimum availability levels based upon the lesser of 10% of the borrowing base or commitments, as defined in the Credit Facility.  

Availability under the Credit Facility is based on a borrowing base consisting of merchandise inventory, certain intellectual property and receivables. As of November 1, 2014, we had no borrowings and our remaining availability was $173.6 million. During fiscal 2013 and as of February 1, 2014, we had no outstanding balances under the Credit Facility. In June 2012, Bank of America, N.A. issued a stand-by letter of credit. As of November 1, 2014, the outstanding letter of credit was $0.2 million and expires on June 30, 2015. We do not have any other stand-by or commercial letters of credit outstanding as of November 1, 2014 under the Credit Facility.  

As of November 1, 2014, we are not aware of any instances of noncompliance with any financial covenants.  

11.  Retirement Benefit Plans

Retirement benefit plan liabilities consisted of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Supplemental Executive Retirement Plan (“SERP”)	$	7,511	$	10,551	$	10,434
Other retirement plan liabilities	4,140		4,050		3,738
Total	$	11,651	$	14,601	$	14,172
Less amount classified in accrued expenses related to SERP	5,810		—		—
Less amount classified in accrued expenses related to other retirement plan liabilities	—		262		—
Long-term retirement benefit plan liabilities	$	5,841	$	14,339	$	14,172

401(k) Plan

We maintain a qualified, defined contribution retirement plan with a 401(k) salary deferral feature that covers substantially all of our employees who meet certain requirements.  Under the terms of the plan, employees may contribute, subject to statutory limitations, up to 100% of gross earnings and historically, including fiscal 2013, we have provided a matching contribution of 50% of the first 5% of gross earnings contributed by the participants.  We also have the option to make additional contributions or to suspend the employer contribution at any time. The employer's matching contributions vest over a five-year service period with 20% vesting after two years and 50% vesting after year three.  Vesting increases thereafter at a rate of 25% per year so that participants will be fully vested after five years of service. We also have separate defined contribution plans for eligible employees in both Canada and Puerto Rico who meet certain requirements. We have suspended the Company's matching contribution under the plan in the U.S. and Canada for fiscal 2014. Contribution expense for all plans was not material to the unaudited condensed consolidated financial statements for any period presented.

Supplemental Executive Retirement Plan

We maintain a Supplemental Executive Retirement Plan, or SERP, which is a non-qualified defined benefit plan for certain executives.  The plan is non-contributory and not funded and provides benefits based on years of service and compensation during employment.  Participants are fully vested upon entrance in the plan. Pension expense is determined using the projected unit credit cost method to estimate the total benefits ultimately payable to officers and this cost is allocated to service periods.  The actuarial assumptions used to calculate pension costs are reviewed annually.

16

The components of net periodic pension benefit cost are as follows:

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
	(In thousands)
Service cost	$	55	$	131	$	314	$	397
Interest cost	76		108		279		328
Amortization of prior experience cost	18		18		55		56
Amortization of net loss	6		69		68		241
Net periodic pension benefit cost	$	155	$	326	$	716	$	1,022

We expect to make a payment to Thomas P. Johnson, our former Chief Executive Officer, from our Supplemental Executive Retirement Plan (“SERP”) of approximately $5.8 million, subject to interest rate fluctuations, during the first quarter of 2015. Accordingly, the SERP liability related to Mr. Johnson has been classified as a current liability in our unaudited condensed consolidated balance sheet as of November 1, 2014. Such amount will be paid from our cash flows from operations. At the date of payment to Mr. Johnson, we will record a benefit estimated to be approximately $0.9 million in selling, general and administrative expenses, with a corresponding amount recorded to relieve accumulated other comprehensive loss included in our stockholders' equity. This accounting treatment is in accordance with settlement accounting procedures under the provisions of ASC Topic 715, "Compensation - Retirement Benefits".

During September 2013, we made a payment of approximately $2.2 million to our former President from our SERP. Such amount was paid from our cash flows from operations. In connection with this payment, during the third quarter of 2013, we recorded a charge of $0.6 million of the net actuarial loss (the "settlement loss") as a charge in SG&A, with a corresponding amount recorded to relieve accumulated other comprehensive loss included in our stockholders' equity ($0.4 million, net of tax).

Other Retirement Plan Liabilities

We have a long-term incentive deferred compensation plan established for the purpose of providing long-term incentives to a select group of management. The plan is a non-qualified, non-contributory defined contribution plan and is not funded. Participants in this plan include all employees designated by us as Vice President, or other higher-ranking positions that are not participants in the SERP. We record annual monetary credits to each participant's account based on compensation levels and years as a participant in the plan. Annual interest credits are applied to the balance of each participant's account based upon established benchmarks. Each annual credit is subject to a three-year cliff-vesting schedule, and participants' accounts will be fully vested upon retirement after completing five years of service and attaining age 55. The liability related to this plan was $4.0 million as of November 1, 2014, $3.9 million as of February 1, 2014 and $3.6 million as of November 2, 2013. Compensation expense related to this plan was not material to our unaudited condensed consolidated financial statements for any period presented.

We maintain a postretirement benefit plan for certain executives that provides retiree medical and dental benefits. The plan is an other post-employment benefit plan, or OPEB, and is not funded. Pension expense and the liability related to this plan were not material to our unaudited condensed consolidated financial statements for any period presented.

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12.  Stock-Based Compensation

Under the provisions of ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”), all forms of share-based payment to employees and directors, including stock options, must be treated as compensation and recognized in the statement of operations.

On May 8, 2014, the Board unanimously approved the 2014 Omnibus Incentive Plan (the “Omnibus Plan”), which is an amendment and restatement of our Second Amended and Restated 2002 Long-Term Incentive Plan, as amended (the “2002 Plan”). The Omnibus Plan became effective upon stockholder approval at the Annual Meeting of Shareholders on June 30, 2014 (the “Omnibus Plan Effective Date”). The Omnibus Plan includes the following key modifications, effective upon the 2014 Omnibus Plan Effective Date:

• Increase of the Aggregate Share Reserve. The aggregate share reserve increased by an additional 5,900,000 shares of common stock for a total share reserve of 6,113,891 shares of common stock under the Omnibus Plan. As of November 1, 2014, there were 4,863,305 shares outstanding under the Omnibus Plan.

• Cash Performance Awards. The Omnibus Plan includes Cash Performance Awards that may be granted with the intent to comply with the “performance-based compensation” exception under Section 162(m) of the Code. Because Cash Performance Awards may be made in addition to stock-based awards, the 2002 Plan has been renamed the “2014 Omnibus Incentive Plan.”

• Term Extension. We extended the term of the Omnibus Plan until May 8, 2024 (the 2002 Plan was scheduled to expire on June 16, 2021).

Restricted Stock Units

Beginning in fiscal 2013, certain of our employees have been awarded restricted stock units, pursuant to restricted stock unit agreements. The restricted stock units awarded to employees cliff vest at varying times, most typically following between one and three years of continuous service from the award date. Certain shares awarded may also vest upon a qualified retirement at or following age 65, or upon a qualified early retirement under the provisions adopted in 2012 whereby the awardee completes 10 years of service, attains age 55 and retires. All restricted stock units immediately vest upon a change in control of the Company. 

The following table summarizes share-settled restricted stock units outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	230		$	9.05
Granted	322		4.81
Vested	(419	)	6.02
Canceled	—		—
Outstanding as of November 1, 2014	133		$	8.34

Total compensation expense is being amortized over the shorter of the achievement of retirement or early retirement status, or the vesting period.  Compensation expense related to restricted units activity was $0.2 million for the third quarter of 2014 and $1.9 million for the first thirty-nine weeks of 2014. There was no compensation expense related to restricted units for the third quarter of 2013 or the first thirty-nine weeks of 2013. As of November 1, 2014, there was $0.4 million of unrecognized compensation cost related to restricted stock units that is expected to be recognized over the weighted average period of one year.  The total fair value of units vested was $2.4 million during the third quarter of 2014 and $2.5 million during the first thirty-nine weeks of 2014. No units vested during the third quarter 2013 or the first thirty-nine weeks of 2013.

Additionally, beginning in the first quarter of fiscal 2014, certain of our employees have been awarded cash-settled restricted stock units, pursuant to cash-settled restricted stock unit agreements. The cash-settled restricted stock units awarded to employees cliff vest at varying times up to approximately three years of continuous service. Certain shares awarded may also vest upon a qualified retirement at or following age 65, or upon a qualified early retirement under the provisions adopted in 2013 whereby the awardee completes 10 years of service, attains age 55 and retires. All cash-settled restricted stock units immediately vest upon a change in control of the Company.  We may, in our sole discretion, at any time during the term, convert the cash-settled restricted

18

stock units for stock-settled restricted stock units. Currently, we do not have the intent to convert the cash-settled restricted stock units for stock-settled restricted stock units and as a result it is classified as a liability. The cash-settled restricted stock units are treated as liability awards in accordance with ASC 718.

The following table summarizes cash-settled restricted stock units outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	—		$	—
Granted	1,219		3.01
Vested	—		—
Canceled	(103	)	3.01
Outstanding as of November 1, 2014	1,116		$	3.01

Total compensation expense is being amortized over the shorter of the achievement of retirement or early retirement status, or the vesting period.  Compensation expense related to restricted shares activity was $0.4 million for the third quarter of 2014 and $1.1 million for the first thirty-nine weeks of 2014. As of November 1, 2014, there was $2.2 million of unrecognized compensation cost related to cash-settled restricted stock units that is expected to be recognized over the weighted average period of two years.  

Restricted Shares

Certain of our employees and all of our directors have been awarded non-vested stock (restricted shares), pursuant to restricted stock award agreements. The restricted shares awarded to employees generally cliff vest after up to three years of continuous service.  Beginning in November 2012, certain shares awarded after such date may also vest upon a qualified retirement at age 65, or upon a qualified early retirement under the provisions adopted in 2012 whereby an awardee completes 10 years of service, attains age 55 and retires. All restricted shares immediately vest upon a change in control of the Company.  Grants of restricted shares awarded to directors vest in full after one year.

The following table summarizes non-vested shares of stock outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	1,856		$	14.82
Granted	299		4.50
Vested	(533	)	18.44
Canceled	(109	)	12.07
Outstanding as of November 1, 2014	1,513		$	11.70

Total compensation expense is being amortized over the shorter of the achievement of retirement or early retirement status, or the vesting period.  Compensation expense related to restricted shares activity was $2.0 million for the third quarter of 2014 and $2.4 million for the third quarter of 2013.  Compensation expense related to restricted shares activity was $5.7 million for the firstthirty-nine weeks of 2014and$10.0 million for the first thirty-nine weeks of 2013. As of November 1, 2014, there was $6.9 million of unrecognized compensation cost related to restricted shares awards that is expected to be recognized over the weighted average period of one year.  The total fair value of shares vested was $1.5 million during the third quarter of fiscal 2014 and $0.1 million during the third quarter of fiscal 2013. The total fair value of shares vested was $9.8 millionfor the firstthirty-nine weeks of 2014and$7.7 millionfor the firstthirty-nine weeks of 2013.

In connection with the GoJane acquisition, we granted restricted shares to the two individual stockholders of GoJane, with compensation expense recognized over the three year cliff vesting period. If the aggregate dollar value of the restricted shares on the vesting date is less than $8.0 million, then we shall pay to the two individual stockholders an amount in cash equal to the

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difference between $8.0 million and the fair market value of the restricted shares on the vesting date. As of the third quarter of 2014, we recorded additional compensation expense of $0.6 million and a corresponding liability of $4.0 million based on the Company's stock price as of November 1, 2014. As of the first thirty-nine weeks of 2014, we recorded additional compensation expense of $2.6 million. As of the third quarter of 2013 and the firstthirty-nine weeks of 2013, we recorded additional compensation expense and a corresponding liability of $0.7 million as of November 2, 2013.

On October 31, 2013, we entered into Restricted Stock Award Rescission Agreements with certain executives to rescind 229,760 aggregate shares of restricted stock granted on March 29, 2013 under the Aéropostale, Inc. 2002 Long-Term Incentive Plan. The rescission did not have a material impact on the unaudited condensed consolidated financial statements for any period presented and we recorded $1.0 million of compensation cost during the third quarter of 2013 as a result of rescinding such restricted stock awards.

Performance Shares

Certain of our executives have been awarded performance shares, pursuant to performance share agreements. The performance shares cliff vest at the end of three years of continuous service with us. The shares awarded during fiscal 2013 are contingent upon meeting various separate performance conditions based upon consolidated earnings targets or market conditions based upon total shareholder return targets. All performance shares immediately vest upon a change in control of the Company (as communicated to the executives awarded performance shares). Compensation cost for the performance shares with performance conditions related to consolidated earnings targets is periodically reviewed and adjusted based upon the probability of achieving certain performance targets. If the probability of achieving targets changes, compensation cost will be adjusted in the period that the probability of achievement changes. The fair value of performance based awards is based upon the fair value of the Company's common stock on the date of grant. For market based awards that vest based upon total shareholder return targets, the effect of the market conditions is reflected in the fair value of the awards on the date of grant using a Monte-Carlo simulation model. A Monte-Carlo simulation model estimates the fair value of the market based award based upon the expected term, risk-free interest rate, expected dividend yield and expected volatility measure for the Company and its peer group. Compensation expense for market based awards is recognized over the vesting period regardless of whether the market conditions are expected to be achieved.

The following table summarizes performance shares of stock outstanding as of November 1, 2014:

	Performance-based			Market-based
	Performance Shares			Performance Shares
	Shares	Weighted Average Grant-Date Fair Value		Shares		Weighted Average Grant-Date Fair Value
	(In thousands)			(In thousands)
Outstanding as of February 2, 2014	—	$	—	391		$	20.01
Granted	—	—		676		5.34
Vested	—	—		—		—
Canceled	—	—		(528	)	11.06
Outstanding as of November 1, 2014	—	$	—	539		$	10.37

Total compensation expense is being amortized over the vesting period. Compensation expense related to the market-based performance shares was a benefit of $1.5 million for the third quarter of 2014 and expense of $0.6 million for the third quarter of 2013. Compensation expense related to the market-based performance shares was expense of $0.2 millionfor the firstthirty-nine weeks of 2014 and expense of $1.4 million for the first thirty-nine weeks of 2013. Certain of our performance-based performance shares did not achieve a grant date and therefore are not reflected in the table. As a result of the departure of Mr. Johnson after the end of the second quarter of 2014, we recognized a benefit of $2.0 million during the third quarter of 2014 resulting from the reversal of the related stock-based compensation expense.

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The following table summarizes unrecognized compensation cost and the weighted-average years expected to be recognized related to performance share awards outstanding as of November 1, 2014:

	Performance-based		Market-based
	Performance Shares		Performance Shares
Total unrecognized compensation (in millions)	$	—	$	3.2
Weighted-average years expected to be recognized over (years)	0		2

Cash-Settled Stock Appreciation Rights ("CSARs")

In conjunction with the execution of the employment agreement with Mr. Johnson on May 3, 2013, we granted him an award of CSARs, with an award date value of $5.6 million. The number of CSARs granted was determined in accordance with the agreement by dividing $5.6 million by the Black Scholes value of the closing price of a share of the Company's common stock on the award date. The CSARs are currently being treated as a liability based award. For the third quarter of 2014, our expected volatility was 64%, expected term was 0.8 years, risk-free interest rate was 0.09% and expected forfeiture rate was 0%. The CSARs have a term of seven years and will vest in equal 1/3 increments over three years. Additionally, we may, in our sole discretion, at any time during the term, exchange a CSAR for another form of equity which is of equal value to the CSAR at the time of the exchange. For thethird quarter of 2014, we recorded less than $0.1 million of benefit related to this incentive award and $0.3 million of benefit during the first thirty-nine weeks of 2014. For the third quarter of 2013, we recorded less than $0.1 million of benefit related to this award and $0.4 million of expense during the first thirty-nine weeks of 2013. As of November 1, 2014, there was no unrecognized compensation cost related to CSARs.  As a result of the departure of Mr. Johnson after the end of the second quarter of 2014, 2/3 of these CSARs were forfeited. The remaining vested shares will expire within a year from Mr. Johnson's departure date.

Performance Based Bonus

The Employment Agreement with Julian R. Geiger, our Chief Executive Officer, provides for a special performance based bonus. If, during any consecutive 90 calendar day period during the 3^rd year of the term of the Employment Agreement the average closing price per share of the Company’s common stock is $15.93 or higher, Mr. Geiger will be entitled to a performance-based cash bonus equal to 2% of the amount, if any, by which the Company’s average market capitalization during the period with the highest 90 day average stock price during the 3^rd year of the term of the Employment Agreement exceeds $255,360,600 (the “Effective Date Market Cap”). If prior to the achievement of such performance metric (but not during the first 90 days of the term of the agreement), Mr. Geiger’s employment is terminated by the Company without Cause, by Mr. Geiger for Good Reason, upon Mr. Geiger’s death or by the Company due to his Disability, or there is a Change of Control (each a “Qualifying Event”), and as of the date of such Qualifying Event the common stock price exceeds $3.24, then, the amount of the performance-based cash bonus will instead be 2% of the amount, if any, by which the Company’s average market capitalization over the 30 calendar day period immediately preceding the Qualifying Event exceeds the Effective Date Market Cap.

This bonus is a market and service based liability award that is required to be marked-to-market under ASC 718. The fair value of this award is estimated using a Monte-Carlo simulation model. A Monte-Carlo simulation model estimates the fair value of a market based award based upon the expected term, risk-free interest rate, expected dividend yield and expected volatility measure for the Company. Compensation expense for this award is recognized over the vesting period regardless of whether the market condition is expected to be achieved. We have recorded a liability for this award that was immaterial to the unaudited condensed financial statements as of November 1, 2014.

Stock Options

We have an Omnibus Incentive Plan under which we may grant qualified and non-qualified stock options to purchase shares of our common stock to executives, consultants, directors, or other key employees.  Stock options may not be granted at less than the fair market value at the date of grant. Stock options generally vest over four years on a pro-rata basis and expire after eight years. All outstanding stock options immediately vest upon (i) a change in control of the Company (as defined in the plan) and (ii) termination of the employee within one year of such change of control.

The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model requires certain assumptions, including estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of our common stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). For the first thirty-nine weeks of 2014, our expected volatility was 52.8% to 56.1%, expected term was 3.96 to 5.00 years, risk-free interest rate was 1.17% to 1.58%

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and expected forfeiture rate was 0%. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation and consequently, the related amount recognized in the unaudited condensed consolidated statements of operations.

The effects of applying the provisions of ASC 718 and the results obtained through the use of the Black-Scholes option-pricing model are not necessarily indicative of future values.

The following table summarizes stock option transactions for common stock during the first thirty-nine weeks of 2014:

	Number of Shares		Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In millions)
Outstanding as of February 2, 2014	377		$	16.61
Granted	2,030		3.24
Exercised	—		—
Canceled1	(110	)	13.84
Outstanding as of November 1, 2014	2,297		$	4.93	2.63	$	—
Options vested as of November 1, 2014 and expected to vest2	2,297		$	4.93	2.63	$	—
Exercisable as of November 1, 2014	262		$	17.78	0.75	$	—

¹ The number of options canceled includes approximately 105,000 expired shares.

² The number of options expected to vest takes into consideration estimated expected forfeitures.

Included in the table above and in connection with his employment agreement, Mr. Geiger was granted an award of options to purchase 2.0 million shares of our common stock. These stock options have a strike price of $3.24 per share, vest over three years on a pro-rata basis, and have a seven year life.

We recognized $0.2 million in compensation expense related to stock options during the third quarter of 2014 and less than $0.1 million during the third quarter of 2013.   We recognized $0.2 million in compensation expense related to stock options during the first thirty-nine weeks of 2014 and less than $0.1 million during the first thirty-nine weeks of 2013. For the first thirty-nine weeks of 2014andthirty-nine weeks of 2013, the intrinsic value of options exercised was zero.

The following table summarizes information regarding non-vested outstanding stock options as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Non-vested as of February 2, 2014	10		$	6.41
Granted	2,030		3.24
Vested	—		—
Canceled	(5	)	6.43
Non-vested as of November 1, 2014	2,035		$	3.25

As of November 1, 2014, there was $2.8 million of unrecognized compensation cost related to non-vested options that we expect to be recognized over the remaining weighted-average vesting period of three years.

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13.  Commitments and Contingent Liabilities

Legal Proceedings - In October 2011, Aéropostale, Inc. and senior executive officers Thomas P. Johnson and Marc D. Miller were named as defendants in an action amended in February 2012, City of Providence v. Aéropostale, Inc., et al., No. 11-7132, a class action lawsuit alleging violations of the federal securities laws.  The lawsuit was filed in New York federal court on behalf of purchasers of Aéropostale securities between March 11, 2011 and August 18, 2011.  The lawsuit alleges that the defendants made materially false and misleading statements regarding the Company's business and prospects and failed to disclose that Aéropostale was experiencing declining demand for its women's fashion division and increasing inventory.  A motion to dismiss was denied on March 25, 2013.  Aéropostale and the plaintiffs have entered into a settlement agreement resolving the claims made in this action, without any admission of liability, for the amount of $15 million, all of which was funded with insurance proceeds. The settlement received final court approval on May 9, 2014.

Also in October 2011, current and former Aéropostale directors and/or senior executive officers Julian R. Geiger, Ronald R. Beegle, Robert B. Chavez, Michael J. Cunningham, Evelyn Dilsaver, John Haugh, Karin Hirtler-Garvey, John D. Howard, Thomas P. Johnson, and David B. Vermylen were named as defendants in Bell v. Geiger, et al., No. 652931/2011, a shareholder derivative lawsuit filed in New York state court seeking relief derivatively on behalf of Aéropostale.  The action alleged that the defendants breached their fiduciary duties to Aéropostale between February 3, 2011 and August 3, 2011 by failing to establish and maintain internal controls that would have prevented the Company from disseminating allegedly false and misleading and inaccurate statements and other information to shareholders, and to manage and oversee the Company.  As a result, plaintiff alleged that the defendants exposed the Company to potential liability in the federal securities class action lawsuit described above.

In February 2012, current and former Aéropostale directors and/or senior executive officers Mindy Meads, Bodil Arlander, Julian Geiger, Karin Hirtler-Garvey, Ronald Beegle, Robert Chavez, Michael Cunningham, Evelyn Dilsaver, John Haugh, John Howard, Thomas Johnson, Arthur Rubinfeld, and David Vermylen were named as defendants in The Booth Family Trust v. Meads, et al., No. 650594/2012, a shareholder derivative lawsuit filed in New York state court, seeking relief derivatively on behalf of Aéropostale.  As in Bell, this action alleges that the defendants breached their fiduciary duties to Aéropostale by failing to establish and maintain internal controls that would have prevented the Company from disseminating allegedly false and misleading and inaccurate statements and other information to shareholders, and to manage and oversee the Company.  As a result, and as in Bell, plaintiff alleges that the defendants have exposed the Company to losses and damages, including civil liability from the securities class action suit described above.

On April 24, 2012, the New York Supreme Court, New York County, issued an Order consolidating and staying the Bell and Booth actions pending a ruling on the motion to dismiss filed in the City of Providence federal securities class action. Following denial of the motion to dismiss in the federal securities class action, plaintiff filed an amended complaint in the consolidated Bell/Booth action. Defendants have moved to dismiss that complaint. A hearing on the motion to dismiss the Bell/Booth action occurred on January 7, 2014 and at that hearing the court granted the Defendants motion to dismiss the complaint. The plaintiffs have not appealed and the court's decision is final.

During February 2014, we settled litigations related to California wage and hour matters. During the first thirty-nine weeks of 2014, we made settlement payments of $3.6 million. In addition, we have remaining liabilities previously recorded of $0.8 million as of November 1, 2014 related to these settlements.

We are also party to various litigation matters and proceedings in the ordinary course of business.  In the opinion of our management, dispositions of these matters are not expected to have a material adverse effect on our financial position, results of operations or cash flows.

Contingencies - On May 23, 2014, we entered into $150.0 million senior secured credit facilities with affiliates of Sycamore Partners. In connection with this agreement, we entered into an exclusive sourcing agreement with an affiliate of Sycamore Partners that requires us to purchase a minimum volume of product for 10 years. This purchase commitment will commence during the first quarter of fiscal 2016, and is between $240.0 million and $280.0 million per annum depending on the year (see Note 3).

In June 2012, Bank of America, N.A. issued a stand-by letter of credit. As of November 1, 2014, the outstanding letter of credit was $0.2 million and expires on June 30, 2015. We do not have any other stand-by or commercial letters of credit as of November 1, 2014.

We have various product license agreements that obligate us to pay the licensee at least the guaranteed minimum royalty amount based on sales of their products.

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We have not issued any third party guarantees or commercial commitments as of November 1, 2014.

Executive Severance Plan - On November 12, 2013, we adopted a Change of Control Severance Plan ("the Plan"), which entitles certain executive level employees to receive certain payments upon a termination of employment after a change of control (as defined in the Plan) of the Company. The adoption of the Plan did not have any impact on the unaudited condensed consolidated financial statements for any periods presented.

Employment Agreement - On August 18, 2014, we entered into an Employment Agreement with Mr. Geiger pursuant to which he will serve as our Chief Executive Officer. The Employment Agreement, which has a three-year term, provides for an annual salary of $1.5 million in addition to a performance based bonus (see Note 12).

14.  Income Taxes

We review the annual effective tax rate on a quarterly basis and make necessary changes if information or events merit.  The estimated annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates.  The estimated annual effective tax rate may fluctuate due to changes in forecasted annual operating income; changes to the valuation allowance for deferred tax assets; changes to actual or forecasted permanent book to tax differences (non-deductible expenses); impacts from future tax settlements with state, federal or foreign tax authorities (such changes would be recorded discretely in the quarter in which they occur), or impacts from tax law changes.  To the extent such changes impact our deferred tax assets/liabilities, these changes would generally be recorded discretely in the quarter in which they occur. During the third quarter of 2014, we recorded a tax benefit of approximately $7.1 million related to the carryback of certain NOL’s due to tax accounting method changes filed in the third quarter and the release of reserves for uncertain tax benefits due to a favorable audit resolution. During the first thirty-nine weeks of 2014, we recorded a net discrete benefit of approximately $2.7 million. This net tax benefit was the result of tax expense of approximately $4.4 million to reduce certain state deferred tax assets, primarily resulting from the planned closures of the mall-based P.S. from Aéropostale stores offset by the above mentioned $7.1 million in discrete tax benefit recorded in the third quarter which is discussed above.

We follow the provisions of ASC Topic 740, “Income Taxes”, which includes the accounting and disclosure for uncertainty in income taxes.  We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. Uncertain tax positions, inclusive of interest and penalties were $8.2 million as of November 1, 2014, $9.9 million at February 1, 2014, and $3.3 million at November 2, 2013.  Of these amounts, $6.2 million was recorded as a direct reduction of the related deferred tax assets as of November 1, 2014 and February 1, 2014. During the third quarter of 2014 we released $0.8 million of reserves due to a favorable audit resolution within the quarter. This reversal of uncertain tax positions, along with reversal of related deferred tax assets, favorably impacts our effective tax rate. These uncertain tax positions are subject to change based on future events, the timing of which is uncertain, however the Company does not anticipate that the balance of such uncertain tax positions will significantly decrease during the next twelve months.

We file income tax returns in the U.S. and in various states, Canada and Puerto Rico. All tax returns remain open for examination generally for our 2010 through 2013 tax years by various taxing authorities. However, certain states may keep their statute open for six to ten years.

15.  Segment Information

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about a company’s operating segments. In the fourth quarter of 2013, management concluded that we have two reportable segments: a) retail stores and e-commerce; and b) international licensing. As a result, prior year segment information has been recasted to conform to the current year presentation. These reportable segments were identified based on how our business is managed and evaluated. The reportable segments represent the Company’s activities for which separate financial information is available and which is utilized on a regular basis by the Company’s chief operating decision maker (“CODM”) to evaluate performance and allocate resources. The retail stores and e-commerce segment includes Aéropostale U.S., Aéropostale Canada, P.S. from Aéropostale and GoJane. In identifying our reportable segments, the Company considers economic characteristics, as well as products, customers, sales growth potential and long-term profitability. The accounting policies of the Company’s reportable segments are consistent with those described in Note 1 of our Annual Report on Form 10-K for the fiscal year ended February 1, 2014. All intercompany transactions are eliminated in consolidation. We do not rely on any major customers as a source of revenue.  

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The following tables provide summary financial data for each of our segments (in thousands):

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
Net sales:
Retail stores and e-commerce	$	442,906	$	508,813	$	1,219,668	$	1,407,700
International licensing	9,983		5,775		25,234		13,195
Total net sales	$	452,889	$	514,588	$	1,244,902	$	1,420,895

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Loss from operations:
Retail stores and e-commerce 1	$	(43,839	)	$	(41,369	)	$	(140,191	)	$	(101,118	)
International licensing	9,253			5,388			23,048			12,070
Other 2	(19,499		)	(5,053		)	(82,030		)	(16,284		)
Total loss from operations	$	(54,085	)	$	(41,034	)	$	(199,173	)	$	(105,332	)

¹ Such amounts include all corporate overhead and shared service function costs. We have not allocated a portion of these costs to international licensing in this presentation to be consistent with how the CODM reviews the results.

² Other items for the third quarter and first thirty-nine weeks of 2014, which are all related to the retail stores and e-commerce segment, included restructuring charges (See Note 3), store asset impairment charges (See Note 4) and other income (charges) that are not included in the segment income (loss) from operations reviewed by the CODM. Other items for the third quarter of 2013 and first thirty-nine weeks of 2013 included store asset impairment and other charges.

Depreciation expense and capital expenditures have not been separately disclosed as the amounts primarily relate to the retail stores and e-commerce segment. Such amounts are not material for the international licensing segment.

	November 1, 2014		February 1, 2014		November 2, 2013
Total assets:
Retail stores and e-commerce	$	567,032	$	637,927	$	734,083
International licensing	11,292		9,714		8,230
Total assets	$	578,324	$	647,641	$	742,313

16.  Recent Accounting Developments

In August, 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"). Itaddresses financial reporting considerations about an entity’s ability to continue as a going concern. Under ASU 2014-15, management is required to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if “conditions or events raise substantial doubt about [the] entity’s ability to continue as a going concern.” The new standard applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Management is still assessing the impact of the adoption to the unaudited condensed consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ASU

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2014-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Management is still assessing the impact of the adoption to the unaudited condensed consolidated financial statements.

In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU 2014-08"). Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. In addition, the ASU expands the disclosure requirements for disposals that meet the definition of a discontinued operation, requires entities to disclose information about disposals of individually significant components and defines “discontinued operations” similarly to how it is defined under International Financial Reporting Standards 5, Non-current Assets Held for Sale and Discontinued Operations. The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. Management is still assessing the impact of the adoption to the unaudited condensed consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements involve certain risks and uncertainties, including statements regarding our strategic direction, prospects and future results.  Forward-looking statements are generally written in the future tense and/or are preceded by words such as “will”, “may”, “could”, “expect”, “believe”, “anticipate”, “intend”, “estimate”, “seek” or other similar words. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements.  Among the factors that could cause actual results to materially differ from those projected in the forward-looking statements, include changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors; changes in the economy and other events leading to a reduction in discretionary consumer spending; seasonality; risks associated with changes in social, political, economic and other conditions and the possible adverse impact of changes in import restrictions; risks associated with uncertainty relating to the Company's ability to implement its strategies and risks associated with the Company’s ability to implement and realize the anticipated benefits of the Company’s strategic initiatives and cost reduction program. The following discussion as well as any evaluation of our business and future prospects should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 1, 2014and the Risk Factors in Part 1, Item 1A thereof, as well as other reports filed with the SEC. All forward-looking statements included in this report are based on information available to us as of the date hereof, and we assume no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur after such statements are made.

Introduction

Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A,” is intended to provide information to help you better understand our financial condition and results of operations.  Our business is highly seasonal, and historically we realize a significant portion of our sales and cash flow in the second half of the year, driven by the impact of the back-to-school selling season in our third quarter and the holiday selling season in our fourth quarter.  Therefore, our interim period unaudited condensed consolidated financial statements may not be indicative of our full-year results of operations, financial condition or cash flows. We recommend that you read this section along with the unaudited condensed consolidated financial statements and notes included in this report and along with our Annual Report on Form 10-K for the year ended February 1, 2014.

The discussion in the following section is on a consolidated basis, unless indicated otherwise.

Overview

While the United States macro-economic environment and mall traffic continue to remain challenging, we are focused on executing our key merchandising, operational and financial initiatives to improve our performance. As part of our on-going initiative to change perception of the brand and accelerate customer adoption, we created a new brand platform that we have identified as AERO NOW. This new brand platform aims to convey our brand’s authenticity, emotion and relevance to today’s teen.We also continue to make progress on our key initiative of increasing the fashion in our overall assortment, including our exclusive sub-brand businesses, Live Love Dream and the Bethany Mota Collection. We continue to increase our focus on the use of social media influencers in order to be more relevant to today’s teenagers. We recently implemented a new vertical organizational structure to focus on more specific and narrowly defined merchandise classifications. Additionally, significant additional initiatives have recently begun including brand positioning and assortment planning and allocation strategies. Lastly, we are focused on the continued growth of our international licensing business.

We also continue to make progress on our key financial strategies of maintaining appropriate levels of liquidity, optimizing our real estate portfolio and managing our capital spending prudently. With regard to liquidity, on February 21, 2014, we increased the aggregate borrowing capacity on our revolver from $175.0 million to $230.0 million (see Note 10 to the Notes to Unaudited Condensed Consolidated Financial Statements). Additionally, on May 23, 2014, to enhance our liquidity, we entered into $150.0 million in senior secured credit facilities with Sycamore Partners (see Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements). During the second quarter of 2014, we received an income tax refund of approximately $45.0 million.

Operationally, on April 30, 2014, following a strategic review and assessment of changing consumer patterns, management and the Board of Directors approved a comprehensive plan to restructure the P.S. from Aéropostale business and to reduce costs. We have identified key initiatives we estimate will generate approximately $30.0 million to $35.0 million in annualized pre-tax savings, of which approximately $5.0 million to $10.0 million is expected to be achieved during fiscal 2014. Based on changing consumer

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patterns, we plan to close approximately 125 mall-based P.S. from Aéropostale stores on or around the end of fiscal 2014. We plan to focus on faster growing sales channels, including off-mall locations (including outlets), e-commerce and international licensing of P.S. from Aéropostale. We are also exploring other potential third party distribution channels. By taking these steps, we expect to eliminate pre-tax losses of approximately $15.0 million that were generated in the mall-based business in fiscal 2013, excluding any impairment charges. We anticipate that substantially all of the planned store closures will be completed by the end of fiscal 2014. As of November 1, 2014, 11 mall-based P.S. from Aéropostale stores have been closed. The cost reduction program will also target direct and indirect spending across the organization. This has included the reduction of approximately 100 open or occupied corporate positions to align with our current business strategies.

We estimate that we will incur pre-tax restructuring and impairment charges related to these actions totaling approximately $40.0 million to $65.0 million throughout fiscal 2014, of which approximately $25.0 million to $40.0 million are estimated to be cash expenses. Included in the estimate of total pre-tax charges are approximately:

• $5.5 million of consulting and severance expenses resulting from the announced corporate cost reduction initiatives, of which $0.4 million were recorded during the third quarter of 2014 and $5.1 million during the first thirty-nine weeks of 2014.

• $30.5 million of the charges relate to fixed asset impairments resulting primarily from the expected closures of the P.S. from Aéropostale stores, all of which were recorded during the first quarter of 2014.

• $4.0 million of additional severance resulting from the store closures, of which $1.2 million was recorded during the third quarter of 2014 and $2.5 million for the first thirty-nine weeks of 2014. These costs are expected to be recorded through the remainder of fiscal 2014 until the stores are closed.

• The remainder of the charges relate to estimated lease costs in connection with the store closures, which are expected to be recorded during the remainder of fiscal 2014. We expect to pay significantly all lease costs during the fourth quarter of 2014 and first quarter of 2015.

The charges are recognized in restructuring charges in the condensed consolidated statements of operations. The amounts of these estimated costs and charges are preliminary and remain subject to change, pending, among other factors, the outcome of negotiations with third parties. Total charges, actual savings and timing may vary positively or negatively from these estimates due to changes in the scope, underlying assumptions or execution risk of the program throughout its duration.

We also expect to close approximately 75 under-performing Aéropostale stores in the fourth quarter of 2014, bringing the total 2014 closures to approximately 120 U.S. and Canada Aéropostale stores. During 2015, we are considering potentially closing approximately 50 to 75 additional Aéropostale stores, which would bring total closures to a range of approximately 220 to 240 Aéropostale stores since 2013.

On August 18, 2014, we entered into an Employment Agreement (the "Agreement") with Julian R. Geiger pursuant to which he will serve as our Chief Executive Officer. Also, on August 18, 2014, Thomas P. Johnson stepped down as Chief Executive Officer of the Company and no longer serves as a member of the Board. The Agreement provides that Mr. Geiger will be nominated to serve on our Board of Directors at each annual meeting of the Company’s stockholders during the term of the Agreement. Mr. Geiger, 69, previously served as the Company’s Chairman and Chief Executive Officer from August 1998 to February 2010, and thereafter continued to serve as Chairman of the Board and as a part-time advisor to the Company until February 2012. On May 23, 2014, in connection with our strategic transaction with Sycamore Partners, Mr. Geiger was appointed to serve on the Board as a Series B holders designee (see Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements).

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Results of Operations

The following table sets forth our results of operations as a percentage of net sales. We also use this information to evaluate the performance of our business:

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Gross profit	15.2	%	17.1	%	16.2	%	19.0	%
Selling, general and administrative expenses	26.8	%	25.1	%	29.1	%	26.5	%
Restructuring charges	0.3	%	—	%	3.1	%	—	%
Loss from operations	(11.9	)%	(8.0	)%	(16.0	)%	(7.4	)%
Interest expense	0.7	%	—	%	0.5	%	—	%
Loss before income taxes	(12.6	)%	(8.0	)%	(16.5	)%	(7.4	)%
Income tax benefit	(1.0	)%	(3.0	)%	(1.0	)%	(2.4	)%
Net loss	(11.6	)%	(5.0	)%	(15.5	)%	(5.0	)%

Key Performance Indicators

We use a number of key indicators of financial condition and operating performance to evaluate the performance of our business, some of which are set forth in the following table. Comparable changes for the 13-weeks ended November 1, 2014 are compared to the 13-weeks ended November 2, 2013.

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Net sales (in millions)	$	452.9		$	514.6		$	1,244.9		$	1,420.9
Total store count at end of period	1,052			1,124			1,052			1,124
Comparable store count at end of period	1,010			1,038			1,010			1,038
Net sales change	(12		)%	(15		)%	(12		)%	(11		)%
Comparable sales change (including the e-commerce channel)	(11		)%	(15		)%	(12		)%	(15		)%
Comparable average unit retail change (including the e-commerce channel)	3		%	(7		)%	4		%	(7		)%
Comparable units per sales transaction change (including the e-commerce channel)	(4		)%	2		%	(5		)%	2		%
Comparable sales transaction change (including the e-commerce channel)	(11		)%	(10		)%	(11		)%	(10		)%
Net sales per average square foot	$	100		$	110		$	274		$	308
Gross profit (in millions)	$	68.9		$	87.9		$	201.9		$	270.5
Loss from operations (in millions)	$	(54.1	)	$	(41.0	)	$	(199.2	)	$	(105.3	)
Diluted loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)
Average square footage growth over comparable period	(4		)%	3		%	(2		)%	3		%
Change in total inventory over comparable period	(20		)%	(5		)%	(20		)%	(5		)%
Change in store inventory per retail square foot over comparable period	(16		)%	(11		)%	(16		)%	(11		)%
Percentages of net sales by category:
Young Women’s	65		%	65		%	65		%	65		%
Young Men’s	35		%	35		%	35		%	35		%

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Comparison of the 13 weeks endedNovember 1, 2014 to the 13 weeks endedNovember 2, 2013

Net Sales

Net sales consist of our sales from comparable stores, our non-comparable stores, our e-commerce business and international licensing revenue. Our wholly-owned stores are included in comparable store sales after 14 months of operation. Additionally, we have included GoJane sales in our comparable sales beginning in February of fiscal 2014. We consider a remodeled or relocated store with more than a 25% change in square feet to be a new store. Prior period sales from stores that have closed are not included in comparable store sales.

Net sales decreased by $61.7 million, or 12% for the third quarter of 2014. Comparable store sales declined by 11%, compared to the same period last year. The net sales decrease reflects:

• a decrease of $46.5 million in comparable store sales (excluding the e-commerce channel)

• a decrease of $11.9 million in non-comparable store sales

• a decrease of $7.5 million in our e-commerce business

• an increase of $4.2 million in international licensing revenue primarily due to the increase in licensee operated locations to221 as of November 1, 2014 from 89 as of November 2, 2013.

Consolidated comparable sales, including the e-commerce channel, decreased by 12% in our young men's category and 11% in our young women's category. The overall comparable sales, including the e-commerce channel, reflected decreases of 11% in the number of sales transactions and 4% in units per sales transaction, partially offset by an increase of 3% in average unit retail.

Cost of Sales and Gross Profit

Cost of sales includes costs related to merchandise sold, including inventory valuation adjustments, distribution and warehousing, freight from the distribution center to the stores, shipping and handling costs, payroll for our design, buying and merchandising departments and occupancy costs. Occupancy costs include rent, contingent rents, common area maintenance, real estate taxes, utilities, repairs and maintenance, depreciation and amortization and store impairment charges.

Gross profit decreased by $19.0 million for the third quarter of 2014 compared to the same period last year. Gross profit included asset impairment charges of $12.5 million during the third quarter of 2014 and $5.1 million for the third quarter of 2013. Gross profit decreased by 1.9 percentage points, as a percentage of net sales. Gross profit for the third quarter of 2014 included higher asset impairment charges of 1.8 percentage points and lease termination costs of 0.8 percentage points compared to the same period last year. Merchandise margin increased by 1.5 percentage points and depreciation was lower by 0.5 percentage points. These increases were offset by 1.3 percentage points of deleverage impact in occupancy and buying expense resulting from the above mentioned decrease in store sales.

SG&A

SG&A includes costs related to selling expenses, store management and corporate expenses such as payroll and employee benefits, marketing expenses, employment taxes, information technology maintenance costs and expenses, insurance and legal expenses, e-commerce transaction expenses, store pre-opening costs and other corporate level expenses. Store pre-opening costs include store level payroll, grand opening event marketing, travel, supplies and other store pre-opening expenses.

SG&A decreased by $7.7 million for the third quarter of 2014 compared to the third quarter of 2013. SG&A for the third quarter of 2014 included consulting fees of $1.4 million for strategic initiatives. The decrease in SG&A was due to lower store-line expenses of $7.3 million, which primarily consisted of payroll resulting from cost savings initiatives, transaction expenses of $2.1 million primarily due to lower sales and lower corporate expenses of $2.7 million. These decreases were partially offset by higher marketing costs of $2.8 million to support our brand awareness initiatives.

SG&A was 26.8% for the third quarter of 2014 compared to 25.1% for the same period last year, as a percentage of net sales. The increase in SG&A, as a percentage of sales, was due primarily to the deleverage in marketing expenses of 0.9 percentage points, corporate expenses of 0.3 percentage points, the above mentioned consulting fees of 0.3 percentage points, and store-line expenses of 0.2 percentage points, which primarily consisted of payroll.

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Restructuring Charges

Restructuring charges related to the cost reduction program discussed above were $1.7 million, or 0.3% as a percentage of net sales, for the third quarter of 2014. These charges included severance charges of $1.2 million and other exit costs of $0.5 million.

Loss from Operations

As a result of the above, consolidated loss from operations was $54.1 million for the third quarter of 2014, compared to $41.0 million for the third quarter of 2013. The consolidated loss from operations included income from our international licensing segment of $9.3 million for the third quarter of 2014 compared to $5.4 million for the prior period. The increase from international licensing was due to the increase in licensee locations as discussed above.

Income taxes

The effective tax rate was 8.4% for the third quarter of 2014 and 38.0% for the third quarter of 2013. During the first quarter of 2014, we accounted for the utilization of most remaining available NOL carrybacks.  While the balance of 2014 anticipated losses can be carried forward and utilized against future taxable income, the related deferred tax assets have a full valuation allowance.  The lower tax rate for the third quarter of 2014 was primarily due to the valuation allowance provided for these assets. This was partially offset by the recording of tax benefits related to the carryback of certain NOL’s due to tax accounting method changes filed in the third quarter and the release of reserves due to a favorable audit resolution. We expect that our effective tax rate for fiscal 2014 will continue to be unfavorably impacted by the establishment of valuation allowances against deferred tax assets.

Net loss

Net loss was $52.3 million, or $0.66 per diluted share, for the third quarter of 2014, compared to net loss of $25.6 million, or $0.33 per diluted share, for the third quarter of 2013.

Comparison of the 39 weeks endedNovember 1, 2014 to the 39 weeks endedNovember 2, 2013

Net Sales

Net sales decreased by $176.0 million for the first thirty-nine weeks of 2014. Both net sales and comparable store sales declined by 12% compared to the same period last year. The net sales decrease reflects:

• a decrease of $141.1 million in comparable store sales (excluding the e-commerce channel)

• a decrease of $26.9 million in non-comparable store sales

• a decrease of $20.0 million in our e-commerce business

• an increase of $12.0 million in international licensing revenue primarily due to the increase in licensee operated locations to221 as of November 1, 2014 from 89 as of November 2, 2013.

Consolidated comparable sales, including the e-commerce channel, decreased by 13% in our young men's category and 12% in our young women's category. The overall comparable sales, including the e-commerce channel, reflected decreases of 11% in the number of sales transactions and 5% in units per sales transaction, partially offset by an increase of 4% in average unit retail.

Cost of Sales and Gross Profit

Cost of sales includes costs related to merchandise sold, including inventory valuation adjustments, distribution and warehousing, freight from the distribution center to the stores, shipping and handling costs, payroll for our design, buying and merchandising departments and occupancy costs. Occupancy costs include rent, contingent rents, common area maintenance, real estate taxes, utilities, repairs and maintenance, depreciation and amortization and store impairment charges.

Gross profit decreased by $68.6 million for the first thirty-nine weeks of 2014 compared to the same period last year. Gross profit included asset impairment charges of $34.1 million during the first thirty-nine weeks of 2014 and $13.6 million for the first thirty-nine weeks of 2013. Gross profit decreased by 2.8 percentage points, as a percentage of net sales. Gross profit included higher asset impairment charges of 1.7 percentage points and lease termination charges of 0.3 percentage points compared to the same period last year. Additionally, the deleverage impact in occupancy expense and distribution and transportation expense of 1.7 percentage points was partially offset by an increase in merchandise margin of 0.9 percentage points.

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SG&A

SG&A includes costs related to selling expenses, store management and corporate expenses such as payroll and employee benefits, marketing expenses, employment taxes, information technology maintenance costs and expenses, insurance and legal expenses, e-commerce transaction expenses, store pre-opening costs and other corporate level expenses. Store pre-opening costs include store level payroll, grand opening event marketing, travel, supplies and other store pre-opening expenses.

SG&A decreased by $14.0 million for the first thirty-nine weeks of 2014 compared to the first thirty-nine weeks of 2013. SG&A for the first thirty-nine weeks of 2014 included consulting fees of $4.4 million for strategic initiatives. The decrease was due to lower store-line expenses of $16.4 million, which primarily consisted of payroll resulting from cost savings initiatives, transaction expenses of $6.9 million primarily due to lower sales and lower corporate expenses of $2.8 million. These decreases were partially offset by higher marketing costs of $7.5 million, primarily to support our brand awareness initiatives.

SG&A was 29.1% for the first thirty-nine weeks of 2014 compared to 26.5% for the same period last year, as a percentage of net sales. The increase in SG&A, as a percentage of sales, was due primarily to the deleverage impact in corporate expenses of 0.8 percentage points, marketing expenses of 0.9 percentage points, store-line expenses of 0.6 percentage points, which primarily consisted of payroll and the above mentioned consulting fees of 0.4 percentage points. These increases were partially offset by 0.1 percentage points of leverage from transaction costs.

Restructuring Charges

Restructuring charges related to the cost reduction program discussed above were $39.2 million, or 3.1% as a percentage of net sales, for the first thirty-nine weeks of 2014. These charges included P.S. from Aéropostale store impairment charges of $30.5 million, other exit costs of $3.8 million, severance charges of $3.7 million and lease costs of $1.2 million.

Loss from Operations

As a result of the above, consolidated loss from operations was $199.2 million for the first thirty-nine weeks of 2014, compared to $105.3 million for the first thirty-nine weeks of 2013. The consolidated loss from operations included income from our international licensing segment of $23.0 million for the first thirty-nine weeks of 2014 compared to $12.1 million for the prior period. The increase from international licensing was due to the increase in licensee locations as discussed above.

Income taxes

The effective tax rate was 5.9% for the first thirty-nine weeks of 2014 and 32.5% for the first thirty-nine weeks of 2013. Please see the comparison of the 13 weeks ended November 1, 2014 to the 13 weeks ended November 2, 2013 for a further discussion about the effective tax rates.

Net loss

Net loss was $192.9 million, or $2.45 per diluted share, for the first thirty-nine weeks of 2014, compared to net loss of $71.5 million, or $0.91 per diluted share, for the first thirty-nine weeks of 2013.

Liquidity and Capital Resources

Our cash requirements are primarily for working capital, construction of new stores, remodeling or updating of existing stores, and the improvement or enhancement of our information technology systems. Due to the seasonality of our business, we have historically realized a significant portion of our cash flows from operations during the second half of the year. Generally, our cash requirements have been met primarily through cash and cash equivalents on hand during the first half of the year, and through cash flows from operations during the second half of the year. We expect to meet our operating and investing net cash requirements for the next twelve months through existing cash and cash equivalents and by utilizing our revolving credit facility, if necessary.

As of November 1, 2014, we had working capital of $134.8 million, cash and cash equivalents of $109.2 million and $136.0 million of long-term debt as a result of the closing of the financing transaction with Sycamore Partners, an owner of a portion of our outstanding common stock and a related party, on May 23, 2014. We plan to use the proceeds of this financing transaction for working capital and other general corporate purposes (see Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements for a further discussion). As of November 1, 2014, we had no borrowings outstanding under our revolving credit facility. On February 21, 2014, we increased the aggregate borrowing capacity under our revolving credit facility from $175.0

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million to $230.0 million (see Note 10 to the Notes to Unaudited Condensed Consolidated Financial Statements). During the second quarter of 2014, we received an income tax refund of approximately $45.0 million.

Additionally, while we have in the past repurchased our common stock under a stock repurchase program (see Note 6 to the Notes to Unaudited Condensed Consolidated Financial Statements), we do not currently expect to do so during fiscal 2014.

The following table sets forth our cash flows for the period indicated:

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Net cash used in operating activities	$	(101,553	)	$	(93,491	)
Net cash used in investing activities	(23,337		)	(68,394		)
Net cash provided by (used in) financing activities	127,799			(1,362		)
Effect of exchange rate changes	(228		)	(236		)
Net increase (decrease) in cash and cash equivalents	$	2,681		$	(163,483	)

Operating activities- Net cash used in operating activities increased by $8.1 million for the first thirty-nine weeks of 2014 compared to the same period in 2013. The increase in period to period net loss was partially offset by lower cash used for prepaid expenses, other assets and cash from income taxes receivable. During the second quarter of 2014, we received an income tax refund of approximately $45.0 million. Merchandise inventory decreased by 20% in total, or 16% on a per retail square foot basis as of November 1, 2014 compared with November 2, 2013, primarily as a result of lower planned merchandise purchases and the result of sales promotions to liquidate certain aged inventory. Cash flow from accounts payable decreased by $84.9 million, primarily as a result of the lower merchandise inventory.

Investing activities - Investments in capital expenditures are principally for the construction of new stores, remodeling of existing stores and investments in information technology. Net cash used in investing activities decreased by $45.1 million for the first thirty-nine weeks of 2014 compared to the same period in 2013 primarily due to lower capital expenditures. Our future capital requirements will depend primarily on the number of new stores we open, the number of existing stores we remodel and the timing of these expenditures. During fiscal 2014, we plan to invest a total of approximately $22.0 million in capital expenditures. During the first thirty-nine weeks of 2014, we invested $21.1 million, which excludes accruals related to purchases of property and equipment. During the first thirty-nine weeks of 2014, we opened seven Aéropostale stores and one combination store and remodeled 13 Aéropostale stores.

During the first thirty-nine weeks of 2013, we invested $68.0 million in capital expenditures, primarily to construct eight Aéropostale stores, 49 P.S. from Aéropostale stores, to remodel 23 Aéropostale stores and for a number of information technology investments.

Financing activities- Net cash provided by financing activities increased by $129.2 million for the first thirty-nine weeks of 2014 compared to the same period in 2013. Net cash provided by financing activities during the first thirty-nine weeks of 2014, included $137.6 million of net proceeds related to the Sycamore transaction offset by $6.2 million of related deferred financing fees paid in connection with the transaction (see Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements for a further discussion).

Revolving Credit Facility and Financing Transaction with Related Party

In September 2011, we together with certain of our direct and indirect subsidiaries entered into a Third Amended and Restated Loan and Security Agreement with the Lenders party thereto, and Bank of America, N.A., as agent for the ratable benefit of the Credit Parties (the “Credit Facility”). The Credit Facility originally provided for a revolving credit line up to $175.0 million. On February 21, 2014, the Credit Facility was amended, among other things, to increase from $175.0 million to $230.0 million the aggregate amount of loans and other extensions of credit available to the Borrower under the Credit Facility. The Credit Facility is available for working capital and general corporate purposes (see Note 10 to the Notes to Unaudited Condensed Consolidated Financial Statements for a further discussion).

On May 23, 2014, we entered into (i) a Loan and Security Agreement (the "Loan Agreement") with affiliates of Sycamore Partners, (ii) a Stock Purchase Agreement (the "Stock Purchase Agreement") with Aero Investors LLC, an affiliate of Sycamore

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Partners ("Investor"), for the purchase of 1,000 shares of Series B Convertible Preferred Stock of the Company, $0.01 par value (the "Series B Preferred Stock"), and (iii) an Investor Rights Agreement with Sycamore Partners. The Loan Agreement makes available to us term loans in the principal amount of $150.0 million, consisting of two tranches: a five-year $100.0 million term loan facility (the "Tranche A Loan") and a 10-year $50.0 million term loan facility (the "Tranche B Loan" and, together with the Tranche A Loan, the "Term Loans"). The net proceeds of the Term Loans are to be used for working capital and other general corporate purposes (see Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements for a further discussion).

Contractual Obligations

The following table summarizes our contractual obligations as of November 1, 2014:

			Payments Due
	Total		Balance of 2014		In 2015 and 2016		In 2017 and 2018		After 2018
	(In thousands)
Contractual Obligations
Real estate operating leases	$	804,807	$	37,683	$	247,623	$	200,959	$	318,542
Short-term borrowings 1	—		—		—		—		—
Sycamore Tranche A Loan principal	100,000		—		—		—		100,000
Sycamore Tranche B Loan principal 2	50,000		—		5,000		10,000		35,000
Sycamore Tranche A Loan interest	40,000		—		15,000		20,000		5,000
Employment agreement 3	4,125		375		3,000		750		—
Equipment operating leases	8,319		989		5,112		2,218		—
Total contractual obligations	$	1,007,251	$	39,047	$	275,735	$	233,927	$	458,542

¹ The short-term borrowings were repaid on May 23, 2014.

² Although interest is imputed on the Tranche B Loan and recorded as interest expense, the Tranche B Loan does not require any contractual interest payments. The Tranche B Loan will be paid off in equal annual installments of 10% per annum. The Tranche B Loan is scheduled to mature on the earlier of (a) tenth anniversary of the end of the Start-Up Period (as such term is defined in the Sourcing Agreement) and (b) the expiration or termination of the Sourcing Agreement. Under the Sourcing Agreement, MGF is required to pay to us an annual rebate equal to a fixed amount multiplied by the percentage of annual purchases made by us (including purchases deemed to be made by virtue of payment of the shortfall commission) relative to the Minimum Volume Commitment to be applied towards the payment of the required amortization on the Tranche B Loan. The Sourcing Agreement also provides for certain carryover credits if we purchase a volume of product above the Minimum Volume Commitment during the applicable Minimum Volume Commitment Period. See Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements for a further discussion.

³ On August 18, 2014 we entered into an Employment Agreement with Mr. Geiger pursuant to which he will serve as our Chief Executive Officer. The Employment Agreement has a three-year term at a base salary of $1.5 million per annum and is included in the above table.

Mr. Johnson stepped down as Chief Executive Officer of the Company and will no longer serve as a member of the Board, effective as of August 18, 2014. In connection with his employment agreement, Mr. Johnson will be entitled to receive a bonus of approximately $0.4 million during the first quarter of 2015. Mr. Johnson will also be entitled to a retirement plan payment currently estimated at $5.8 million, subject to interest rate fluctuations, paid six months from retirement date (see Note 11 to the Notes to Unaudited Condensed Consolidated Financial Statements). Such amounts are not reflected in the table above.

The real estate operating leases included in the above table do not include contingent rent based upon sales volume, which amounted to approximately 6% of minimum lease obligations in fiscal 2013. In addition, the above table does not include variable costs paid to landlords such as maintenance, insurance and taxes, which represented approximately 53% of minimum lease obligations in fiscal 2013.

As discussed in Note 11 to the Notes to Unaudited Condensed Consolidated Financial Statements, we have a SERP liability of $7.5 million and other retirement plan liabilities of $4.1 million at November 1, 2014.  Such liability amounts are not reflected in the

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table above. We expect to make a payment in the next 12 months of approximately $5.8 million from our SERP which is included in the total SERP liability of $7.5 million.

Our total liabilities for unrecognized tax benefits were $8.2 million at November 1, 2014. Of this amount, $6.2 million was recorded as a direct reduction of the related deferred tax assets.  We cannot make a reasonable estimate of the amount and timing of related future payments. Therefore this amount was not included in the above table.

In June 2012, Bank of America, N.A. issued a stand-by letter of credit under the Credit Facility. As of November 1, 2014, the outstanding letter of credit was $0.2 million and expires on June 30, 2015. We have not issued any other stand-by or commercial letters of credit as of November 1, 2014.

The above table also does not include contingent bonus compensation agreements with certain of our employees. The bonuses become payable if the individual is employed by us on the future payment date. The amount of contingent bonuses that may be paid is $0.2 million during the remainder of fiscal 2014, $0.7 million during fiscal 2015 and $0.2 million during fiscal 2016.

The above table does not reflect contingent purchase consideration related to the fiscal 2012 acquisition of GoJane that is discussed in Note 5 to the Notes to Unaudited Condensed Consolidated Financial Statements. The purchase price includes contingent cash payments of up to an aggregate of $8.0 million if certain financial metrics are achieved by the GoJane business during the five year period beginning on the acquisition date. The fair value of the contingent payments as of November 1, 2014 was estimated to be $5.9 million based on expected probability of payment and we have recorded such liability on a discounted basis.

We have not issued any third party guarantees or commercial commitments as of November 1, 2014.

Off-Balance Sheet Arrangements

Other than operating lease commitments set forth in the table above, and an outstanding letter of credit of $0.2 million, we are not party to any material off-balance sheet financing arrangements.  We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business.  We do not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect our liquidity or the availability of capital resources.  As of November 1, 2014, we have not issued any letters of credit for the purchase of merchandise inventory or any capital expenditures.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenues and expenses. Estimates by their nature are based on judgments and available information. Therefore, actual results could materially differ from those estimates under different assumptions and conditions.

Critical accounting policies are those that are most important to the portrayal of our financial condition and the results of operations and require management's most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our most critical accounting policies have been discussed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.  In applying such policies, management must use significant estimates that are based on its informed judgment. Because of the uncertainty inherent in these estimates, actual results could differ from estimates used in applying the critical accounting policies. Changes in such estimates, based on more accurate future information, may affect amounts reported in future periods.

Asset Impairment Charges

We have recently recorded significant asset impairment charges, and we may be required to record additional charges in the future. Our determination of whether asset impairment has occurred is based on a comparison of the assets’ fair market values with the assets’ carrying values. While we believe that current estimates of the impairment are appropriate, significant and unanticipated changes in future results could require a provision for impairment in a future period that could substantially affect our statement of operations in a period of such change. To the extent that actual cash flows differ materially from our projections, certain stores that are either not impaired or partially impaired may be further impaired in future periods. A 100 basis points decrease in each of our

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future comparable sales assumptions as of November 1, 2014, would have resulted in an additional impairment charge of $1.4 million. Alternatively, a 100 basis points decrease in each of our future gross margin assumptions as of November 1, 2014, would have resulted in an additional impairment charge of $1.7 million.

As of November 1, 2014, there have been no material changes to any of the critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We maintain our cash equivalents in financial instruments, primarily money market funds, with original maturities of three months or less.

As of November 1, 2014, we had no outstanding borrowings under our Credit Facility. The average interest rate for the Credit Facility was 5.75% for the first thirty-nine weeks of 2014. In June 2012, Bank of America, N.A. issued a stand-by letter of credit under the Credit Facility. As of November 1, 2014, the outstanding letter of credit was $0.2 million and expires on June 30, 2015. We have not issued any other stand-by or commercial letters of credit as of November 1, 2014 under the Credit Facility. To the extent that we may borrow pursuant to the Credit Facility in the future, we may be exposed to market risk from interest rate fluctuations.

Unrealized foreign currency gains and losses, resulting from the translation of our Canadian subsidiary financial statements into our U.S. dollar reporting currency, are reflected in the equity section of our unaudited condensed consolidated balance sheet in accumulated other comprehensive income (loss). The unrealized gain of approximately $0.9 million is included in accumulated other comprehensive loss as of November 1, 2014. A 10% movement in quoted foreign currency exchange rates could result in a fair value translation fluctuation of approximately less than $0.5 million, which would be recorded in other comprehensive income (loss) as an unrealized gain or loss.

We also face transactional currency exposures relating to merchandise that our Canadian subsidiary purchases using U.S. dollars.  These foreign currency transaction gains and losses are charged or credited to earnings as incurred. We do not hedge our exposure to this currency exchange fluctuation and transaction gains and losses to date have not been significant.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures: Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer along with our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, our Chief Executive Officer along with our Chief Financial Officer concluded that as of the end of our third quarter ended November 1, 2014, our disclosure controls and procedures are effective.

Changes in Internal Controls Over Financial Reporting: During our third fiscal quarter, there have been no changes in our internal controls over our financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over our financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, please see the description set forth in the “Legal Proceedings” section in Note 13 to the Notes to Unaudited Condensed Consolidated Financial Statements.

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Item 1A. Risk Factors

Other than as set forth below, there are no material changes from the Risk Factors as previously disclosed in our Form 10-K for the fiscal year ended February 1, 2014.

Our ability to make payments on and to repay or refinance our debt and to fund planned capital expenditures depends upon cash balances, availability under our Credit Facility, and our ability to generate cash.

Our ability to make payments on and to repay or refinance our debt and to fund planned capital expenditures will depend on cash balances, availability under our Credit Facility and our ability to generate cash, which is to some extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are unable to service our debt and meet our other commitments, we may be required to adopt one or more alternatives, such as refinancing all or a portion of our debt, selling material assets or operations or raising additional debt or equity capital. We may not be able to successfully carry out any of these actions on a timely basis, on commercially reasonable terms or at all, or be assured that these actions would be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt agreements may restrict us from affecting any of these alternatives. To the extent we are not able to comply with required covenants in our Credit Facility and/or Loan Agreement with affiliates of Sycamore Partners or fail to make scheduled payments on our debt and are unable to obtain a waiver or amendment, our access to the Credit Facility may be limited and we could be in default under the Credit Facility and/or the Loan Agreement.

Failure to effectively execute on or to realize the anticipated benefits of our announced strategic initiatives and cost reduction program could have an adverse effect on our financial condition, results of operations, cash flows and liquidity.

We have previously announced strategic initiatives and a comprehensive cost reduction program as a part of our on-going turnaround plans and strategic business review (the “Program”). As a part of the Program, we have announced that we expect to close approximately 125 mall-based P.S. from Aéropostale stores and pursue other cost reduction efforts. Risks associated with the Program include delays in implementation, changes in plans that impact associated costs, impact on employee morale and failure to meet operational and strategic targets. These efforts could result in our recording additional charges. The inability to successfully implement these initiatives or failure to do so as timely as we anticipate, could impact our ability to achieve anticipated cost reductions or may otherwise harm our business and could have an adverse effect on our financial condition, results of operations, cash flow and liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

37

Item 6. Exhibits

Exhibit No.	Description
10.1	Separation Agreement and Release dated August 18, 2014 between Aéropostale, Inc. and Thomas P. Johnson.*
31.1	Certification by Julian R. Geiger, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification by Marc D. Miller, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification by Julian R. Geiger pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification by Marc D. Miller pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document.*
101. SCH	XBRL Taxonomy Extension Schema.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase.*
101.LAB	XBRL Taxonomy Extension Label Linkbase.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.*

____________

*	Filed herewith.
**	Furnished herewith.
***	Incorporated herein by reference.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Aéropostale, Inc.

/s/ JULIAN R. GEIGER

Julian R. Geiger

Chief Executive Officer

(Principal Executive Officer)

/s/ MARC D. MILLER

Marc D. Miller

Executive Vice President — Chief Financial Officer

(Principal Financial Officer)

Dated: December 8, 2014

39

EX-10.1

EXHIBIT 10.1

AÉROPOSTALE, INC.

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (the “Agreement”), dated August 18, 2014 (the “Effective Date”) is made between Aeropostale, Inc., a Delaware corporation having an office at 112 West 34^th Street, New York_; New York 10120 (“Employer”) and Thomas P. Johnson, an individual residing at 127 Milbob Drive, Ivyland, PA 18974 (“Employee” and collectively with Employer, the “Parties”).

WHEREAS:

(1)    Employee’s active employment with the Employer will continue through August 29, 2014 or such other date as mutually agreed by Employer and Employee (the “Transition Period”) during which time Employee shall continue to be actively employed by Employer for the purpose of finalizing and transitioning matters which Employee is responsible for;

(2)    Employee’s Transition Period shall end on August 29, 2014 or such other date as mutually agreed by Employer and Employee (the “Separation Date”). The parties intend that Employee shall experience a “separation from service” (within the meaning of section 409A of the Internal Revenue Code of 1986, as amended) from the Employer on the Separation Date;

(3)    Employer is willing to provide to the Employee severance benefits, as hereinafter described in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the Parties hereto agree as follows:

1. Reference is made to the employment agreement, dated May 3, 2013, by and between Employer and Employee (the “Employment Agreement”). Capitalized terms utilized herein but not otherwise defined in this Agreement, shall have the meanings ascribed to them in the Employment Agreement.

2. The Parties have mutually agreed and acknowledged that from the period beginning with the Effective Date through the Separation Date, all of the terms and conditions of the Employment Agreement which are unaffected by this Agreement shall remain in full force and effect.

3. As of the Effective Date, Employer and Employee have mutually agreed that Employee will no longer be employed by the Company and shall hereby be deemed to have resigned from the position of Chief Executive Officer, Board member and from any other positions he may have with Employer and its subsidiaries and affiliates.

4. Employee acknowledges and agrees that during the Transition Period, Employee will, on a full-time basis, perform and complete tasks as required to assist in the above-mentioned transition reporting to Employer’s Board of Directors. Employee agrees that he will perform and complete these tasks with the same level of professionalism and commitment to Employer which he has demonstrated prior to the Effective Date.

5. In consideration for (x) continuing to serve Employer until the Separation Date and (y) for the releases and covenants by Employee in this Agreement and the Updated Release attached hereto as Exhibit A, the Employer agrees that following the expiration of the revocation period described in Paragraph 18 below and the Updated Release, without Employee having exercised his right of revocation, Employer will provide Employee with the following:

(a)from the Effective Date through the Separation Date, the Company will continue to provide salary payments to Employee at Employee’s current rate of pay, paid at Employer’s regular payroll intervals and subject to applicable tax withholding and Employee will earn or accrue any bonus, vacation pay, sick pay, pension or retirement credit, 401k contributions or any other benefits during said period, to the extent currently being received and as specifically provided for by this Agreement or by the plans under which such benefits are provided;

(b)upon the Separation Date, subject to the terms and conditions of this Agreement, Employer hereby agrees to pay to Employee in accordance with the terms of the Employment Agreement, in consideration of the mutual promises and releases contained herein, a lump sum severance payment of twenty-four (24) months of Employee’s current base salary less applicable withholding taxes (hereinafter referred to as the “Severance Payment”). The Severance Payment shall be made within ten (10) days of the Separation Date (the “Payment Date”).

(c)upon the Separation Date, and subject to the terms and conditions of this Agreement, Employer hereby also agrees to pay to Employee in accordance with the terms of the Employment Agreement, the pro-rata portion (based on the Separation Date), his 2014 bonus payment amount at the Threshold level, less applicable withholding taxes (the “2014 Bonus Payment”) calculated in accordance with the terms of the Employment Agreement and Employer’s Annual Incentive Plan. The 2014 Bonus Payment shall be paid when Employer typically pays annual incentive plan payments after the end of the applicable fiscal year. For the avoidance of doubt, Employee shall not be entitled to any other or future bonus payments from Employer other than the 2014 Bonus Payment.

(d)for the one (1) year period after the Separation date, Employee shall be entitled to exercise his CSARs and stock options.

(e)upon the Separation Date, Employee’s unvested restricted stock and restricted stock unit grants from Employer, granted under the Employer’s 2002 Stock Option Plan (the “Plan”), shall immediately vest, and shall otherwise be

governed by the terms of the Plan , which has been previously provided to Employee by Employer and United States insider trading laws.

(f)upon the Separation Date, a payment representing any accrued but unused PTO.

The Parties expressly acknowledge and agree that the severance provisions in Section 8.2(d) and Section 9 of the Employment Agreement shall be superseded and replaced by the severance provisions contained herein. For the avoidance of doubt, any and all payment to be made by Employer to Employee pursuant to this Section 5, shall only be a valid obligation of Employer if (x) Employee is not terminated for Cause or resigns without good reason prior to the Separation Date, (y) Employee executes the Updated Release attached hereto within two (2) days following the Separation Date and does not revoke this Agreement or the Updated Release, and (z) Employee has not breached Sections 4 (a breach of Section 4 only must be a material breach), 9, 10 and 12 of this Agreement. "Good reason" means for purposes of this section 5, without the consent of Employee, (i) a material reduction in Employee's base salary, (ii) assignment of duties inconsistent with a senior executive position or (iii) moving of the Employer's New York City corporate headquarters beyond a 50 mile radius of the Employer's existing headquarters location.

6. In addition and separate from this Agreement, Employee shall receive those benefits which Employee is entitled to receive pursuant to and in accordance with the terms and conditions of Employer’s Supplementary Executive Retirement Plan (“SERP”) (such benefits hereinafter referred to as the “SERP payment”). The amount of the SERP Payment shall be finally determined at the time of payment to Employee which payment date is to be the first business day following the six (6) month anniversary of the Separation Date.

7. (a) Employee acknowledges, understands and agrees that, other than the payments and benefits in Sections 5 and 6 above, Employee will not be entitled to receive any remuneration of any kind or nature from Employer, including, but not limited to, vacation pay, bonus pay, car allowance, COBRA payments, or travel, lodging, or any other expense reimbursements or other payments of any kind following the Separation Date; provided, however, that Employee may, if applicable, receive from Employer reimbursement of Employee’s actual reimbursable company-related expenses that he incurred (i) in accordance with Employer’s reimbursement policy and (ii) prior to the Separation Date. Nothing in this Section 7(a) will preclude Employee from participating in COBRA at his own expense.

.(b) As a material inducement to Employer to enter into this Agreement, and in consideration of Employer’s obligations under this Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged by the Employee, Employee hereby irrevocably, unconditionally and generally releases, discharges, and covenants not to sue or bring any claim, action, lawsuit or complaint of any nature whatsoever against

Employer and/or each of Employer’s affiliates, parents, subsidiaries, related companies, divisions, and its past and present officers, directors, employees, and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (collectively, “Releasees”), from and with respect to any and all actions, causes of action, suits, liabilities, claims, and demands whatsoever, whether known or unknown, from the beginning of time until the Separation Date (collectively, “Claims”).

(c) The Parties intend this release to be general and comprehensive in nature and to release all claims and potential claims against the Releasees to the maximum extent permitted at law. Claims being released include, without limitation, any and all claims: (i) arising out of or in any way related to Employee’s employment with Employer or the termination of Employee’s employment with Employer; (ii) pursuant to any contract, express or implied, written or oral; (iii) for wrongful dismissal or termination of employment; (iv) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment relationship and/or specifically that prohibit discrimination on the basis of age, race, color, religion, disability, sex, sexual orientation, national origin, or citizenship, including, without limitation, Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec. 2000 et seq., the Employee Retirement Income Security Act, 29 U.S.C. sec. 1001 et seq., the Americans With Disabilities Act, 42 U.S.C. sec. 1210 et seq., the Family and Medical Leave Act , 29 U.S.C., sec. 2601 et seq., the Civil Rights Act of 1991, the New York State Human Rights Law, all as amended, and any applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes. Without limiting the generality of the above, Employee hereby waives and releases any rights or claims that he may have arising under the Age Discrimination in Employment Act of 1967, as amended, or to any statutes, regulations or ordinances of any state or governmental entity, all of which have been, could be or could have been asserted by Employee or on his behalf (and all of which have been, would be or would have been disputed by Releasee); (v) for tort, tortious or harassing conduct, infliction of mental distress, interference with contract, fraud, libel or slander; (vi) for damages, including, without limitation, punitive or compensatory damages or for attorneys’ fees, expenses, costs, wages, injunctive or equitable relief; and (vii) arising out of or in any way related to any transactions, occurrences, acts, statements, disclosures or omissions occurring prior to the date of this Agreement; provided, however, that this release in Section 7 specifically excludes matters relating to the performance or enforcement of this Agreement and the SERP. Notwithstanding anything in this Agreement to the contrary, Employee’s rights to indemnification and to be held harmless provided by the Employer’s Bylaws or otherwise shall remain in effect and not subject to any release.

(d) Employee agrees to execute and deliver to Employer the Updated Release on or within two (2) days following the Separation Date. The Updated Release contains a general release of claims co-extensive and substantially similar to the release set forth in this Section 8 and includes the period from the date of the execution of this Agreement through and including the date of execution of the Updated Release.

8.    As a material inducement to Employee to enter into this Agreement, and in consideration of Employee’s obligations under this Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged by Employer, Employer hereby irrevocably, unconditionally and generally releases, discharges, and covenants not to sue or bring any claim, action, lawsuit or complaint of any nature whatsoever against Employee from and with respect to any and all actions, causes of action, suits, liabilities, claims, and demands which are known to Employer on the Separation Date (collectively, “ Employer Claims”). The Parties intend this release to be general and comprehensive in nature and to release all known claims and potential claims of Employer against Employee to the maximum extent permitted at law. Employer Claims being released include, without limitation, any and all claims: (i) arising out of or in any way related to Employee’s employment with Employer or the termination of Employee’s employment with Employer; (ii) pursuant to any contract, express or implied, written or oral; (iii) for termination of employment; (iv) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment relationship; provided, however, that this release by Employer of Employee shall not apply to any actions, claims, lawsuits, inquiries, investigations (formal or informal) by or from any third party, including, but not limited to, any governmental, regulatory or quasi-regulatory agency, which arises out of or in any manner is associated with Employee’s activities while she employed by Employer. This release by its terms specifically excludes (A) any matters relating to the performance of this Agreement and (B) as related to Employees activities while employed by Employer arising out of any act or omission by Employee that would constitute (x) fraud or embezzlement or (y) a felony under applicable state, Federal, local or foreign law, unless Employer had actual knowledge on the Separation Date of any such fraud, embezzlement or felony.

9.During the twenty-four (24) month period commencing on the Separation Date, Employee shall not, directly or indirectly, solicit, raid, entice or induce any person who is presently an employee of Employer or any of its Subsidiaries, or, at any time during the six (6) months immediately prior to the Separation Date, has been an employee of Employer or any of its Subsidiaries, to leave the employment of Employer.

10.During the twenty-four (24) month period commencing on the Separation Date, Employee shall not, directly or indirectly, within the United States become an executive, officer, employee, consultant or otherwise render services to, lend funds to, serve on the board of, invest in (other than as a 1% or less shareholder of a publicly traded corporation) or guarantee the debts of, any Company Competitors. The Company Competitors are those companies set forth on Exhibit B of the Employment Agreement.

11.Employee represents that, on or prior to the Separation Date, he will return all of Employer’s property in accordance with Section 13. 8 of the Employment Agreement.

12.Employee acknowledges and agrees that, during the course of his employment with Employer, Employee had access to and acquired Confidential Information. As used in this Agreement, “Confidential Information” means any business, financial or technical information or

trade secrets or proprietary information (including, without limitation, account records, plans for the creation or disposition of products, Employer correspondences to employees or others (whether electronic or otherwise) of a confidential nature, any Employer materials which were marked as confidential, product development plans, financial data, financial plans, marketing strategies, and personnel records and evaluations), the use or disclosure of which could be detrimental to the interests of Employer, its shareholders, directors, officers, employees or agents. Employee represents, warrants and covenants to Employer that he has not and will not copy, duplicate (either electronically or by any other means), disseminate, retain or utilize in any manner any of Employer’s Confidential Information for his personal use or the use of any third party and further represents, warrants and covenants to keep Confidential Information confidential at all times and not to disclose any Confidential Information, except as the same may be required under compulsion of law, and further provided that Employee gives Employer prompt notice of any such request so that Employer may seek a protective order to prevent disclosure.

13.The Parties agrees that they will not directly or indirectly: (a) disparage, discredit, refer to the other Party in a detrimental manner; or (b) initiate or participate in any discussion or communication that reflects negatively on the other Party or, in the case of Employer, its employees, officers or directors. A disparaging or detrimental statement is any communication, oral or written, which would tend to cause the recipient of the communication to question the business condition, integrity, competence, fairness, or good character of the person or entity to whom the communication relates.

14.If Employee breaches any of Sections 4 (a breach of Section 4 only must be a material breach), 9, 10 and 12 of this Agreement, Employer, in addition to all of the other rights which it may have in equity or in law, shall be released from any obligation to make the payments referred to in Section 5. Employee understands and agrees that if the Employee breaches the confidentiality or the non-disparagement provisions of this Agreement it will cause the Employer irreparable and continuing harm, for which the Employer would have no legal remedy. Consequently, Employee breaches any part of the confidentiality or the non-disparagement provisions of this Agreement, the Employer will have the right to proceed against the Employee in a court of law or before an arbitrator for injunctive relief as well as seek all other remedies and damages available to the Employer.

15.The provisions of this Agreement are severable, and if any provision or term, or part of provision or term of this Agreement is declared or determined by a court to be illegal or invalid, the validity of the remaining parts, provisions or terms shall not be affected thereby, and said illegal or invalid part, provision or term shall not be deemed to be a part of this Agreement. It is the intention of the Parties that, if a court construes any provision or clause of this Agreement to be illegal, void, unreasonable or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall modify the duration, area, or matter of such provision and, in its modified form, such provision shall then be enforceable and shall be enforced to the fullest extent of law.

16.Nothing contained in this Agreement or the fact that Employer has signed this Agreement shall be considered as an admission or suggestion of any liability of Employer to Employee, and Employer specifically disclaims any liability for any wrongful acts against Employee on the part of itself, its employees or agents.

17.Employer and Employee each agree to bear its and his own costs, expenses, attorneys’ fees and other expenditures incurred in connection with this Agreement.

18.Employee will have no more than twenty-one (21) days following the Effective Date to consider this Agreement. This Agreement shall not become effective until the eighth (8^th) day following Employee’s execution thereof. Employee shall have the right to revoke this Agreement for a period of seven (7) days following his execution of this Agreement, by giving written notice of such revocation to the Company.

19.(a)    The intent of the Parties is that payments and benefits under this Agreement are either exempt from or comply with Section 409A of the Internal Revenue Code (“Section 409A”) and this Agreement shall be interpreted to that end. The Parties acknowledge and agree that the interpretation of Section 409A and its application to the terms of this Agreement is uncertain and may be subject to change as additional guidance and interpretations become available. In no event whatsoever shall Employer be liable for any tax, interest or penalties that may be imposed on Employee by Section 409A or any damages for failing to comply with Section 409A.

(b)If any payment, compensation or other benefit provided to Employee in connection with his employment termination is determined, in whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section 409A and Employee is a “specified employee” as defined in Section 409A, no part of such payments shall be paid before the day that is six (6) months plus one (1) day after Employee’s date of termination or, if earlier, Employee’s death (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to Employee during the period between the date of termination and the New Payment Date shall be paid in a lump sum on such New Payment Date.

(c)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment until such termination is also a “separation from service” within the meaning of Section 409A.

(d)All reimbursements for costs and expenses under this Agreement shall be paid in no event later than the end of the calendar year following the calendar year in Employee incurs such expense. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursements or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.

20.Neither party has relied on any representation with respect to the subject matter of this Agreement or any representation inducing the execution of this Agreement except such representations as are expressly set forth in this Agreement. This Agreement (a) represents the entire agreement of the Parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof including Section 8.2(d) and Section 9 of the Employment Agreement, and the terms of this Agreement may not be modified, amended or supplemented except by an agreement in writing signed by both Parties hereto; (b) shall inure to the benefit of, and be binding upon, the Parties hereto and their respective legal representatives, heirs and successors; (c) shall be governed by, and construed in accordance with, the laws of the State of New York (regardless of the laws that might otherwise govern under applicable principles of conflicts of laws) and venue and jurisdiction of any disputes arising pursuant to this Agreement shall be proper in any court sitting in New York County, New York.

21..Employee acknowledges and represents that he has read this Agreement and fully understands the terms of this Agreement and that he has been advised by Employer to consult with an attorney, and he has had sufficient opportunity to review this Agreement and to confer with his attorney before signing this Agreement. Employee further acknowledges that he is voluntarily and knowingly entering into this Agreement.

EMPLOYEE UNDERSTANDS AND INTENDS THAT, BY SIGNING THIS AGREEMENT, HE HAS WAIVED ALL CLAIMS AGAINST EMPLOYER AND ITS AFFILIATES, PARENTS, SUBSIDIARIES, RELATED COMPANIES, DIVISIONS AND ITS PAST AND PRESENT OFFICERS, DIRECTORS, EMPLOYEES AND THE HEIRS, EXECUTORS, ADMINISTRATORS, RECEIVERS, SUCCESSORS AND ASSIGNS OF ALL OF THE FOREGOING, AND CERTIFIES THAT HE ENTERS INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND AFTER HAVING SUFFICIENT OPPORTUNITY TO CONSULT WITH HIS ATTORNEY AND TO REVIEW THIS DOCUMENT (INCLUDING ANY EXHIBITS HERETO) IN ITS ENTIRETY.

AÉROPOSTALE, INC.
BY:	/s/ Marc D. Miller
	Name: Marc D. Miller
	Title: CFO
	DATE: August 18, 2014
BY:	/s/ Thomas P. Johnson
	Thomas P. Johnson
	DATE: August 18, 2014

Exhibit A

Updated Release Agreement

This Updated Release Agreement (this “Updated Release”) is hereby entered into between Aeropostale, Inc., a Delaware corporation (“Employer”) and Thomas P. Johnson (“Employee” and collectively with Employer, the “Parties”).

WHEREAS, the Parties previously entered into that certain Separation Agreement and Release dated August 18, 2014 (the “Release Agreement”), detailing the terms of Employee’s separation from the Company (capitalized terms used herein and not defined herein shall have the respective meanings set forth in the Release Agreement);

WHEREAS, this Updated Release formed part of the Release Agreement, was expressly incorporated therein, and was attached as Exhibit A to the Release Agreement; and

WHEREAS, pursuant to the Release Agreement, Employee agreed to execute and deliver to the Company on or within two (2) days following the Separation Date this Updated Release containing a general release of claims co-extensive and substantially similar with the release set forth in the Release Agreement.

NOW THEREFORE, for good and valuable consideration, including but not limited to the payments and benefits detailed under the Release Agreement, the continued provision of which is conditioned on Employee’s signing and returning this Updated Release, the Parties hereby agree to the following:

1.    In consideration of the terms of the Release Agreement, Employee hereby irrevocably, unconditionally and generally releases, discharges, and covenants not to sue or bring any claim, action, lawsuit or complaint of any nature whatsoever against Employer and/or each of Employer’s affiliates, parents, subsidiaries, related companies, divisions, and its past and present officers, directors, employees, and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (collectively, “Releasees”), from and with respect to any and all actions, causes of action, suits, liabilities, claims, and demands whatsoever, whether known or unknown, by reason of any matter or cause whatsoever arising prior to the time he signs this Agreement (collectively, “Claims”).

2.    The Parties intend this release to be general and comprehensive in nature and to release all claims and potential claims against the Releasees to the maximum extent permitted at law. Claims being released include, without limitation, any and all claims: (a) arising out of or in any way related to Employee’s employment with Employer or the termination of Employee’s employment with Employer; (b) pursuant to any contract, express or implied, written or oral; (c) for wrongful dismissal or termination of employment; (d) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment relationship and/or specifically that prohibit discrimination on the basis of age, race, color, religion, disability, sex, sexual orientation, national origin, or citizenship, including, without

limitation, Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec. 2000 et seq., the Employee Retirement Income Security Act, 29 U.S.C. sec. 1001 et seq., the Americans With Disabilities Act, 42 U.S.C. sec. 1210 et seq., the Family and Medical Leave Act , 29 U.S.C., sec. 2601 et seq., the Civil Rights Act of 1991, the New York State Human Rights Law, all as amended, and any applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes. Without limiting the generality of the above, Employee hereby waives and releases any rights or claims that he may have arising under the Age Discrimination in Employment Act of 1967, as amended, or to any statutes, regulations or ordinances of any state or governmental entity, all of which have been, could be or could have been asserted by Employee or on his behalf (and all of which have been, would be or would have been disputed by the Releasees); (e) for tort, tortious or harassing conduct, infliction of mental distress, interference with contract, fraud, libel or slander; (f) for damages, including, without limitation, punitive or compensatory damages or for attorneys’ fees, expenses, costs, wages, injunctive or equitable relief; and (g) arising out of or in any way related to any transactions, occurrences, acts, statements, disclosures or omissions occurring prior to the date of this Agreement. Provided, however, that this release specifically excludes matters relating to the performance or enforcement of this Agreement and the SERP. Further provided that Employee’s rights to indemnification and to be held harmless provided by Employer’s Bylaws or otherwise shall remain in effect and not subject to any release.

3.    Employee acknowledges that before entering into this Updated Release, Employee has had the opportunity to consult with counsel about any questions regarding the Updated Release and the Release Agreement, and Employee has been advised to do so if he so choses. Employee further acknowledges that Employee has entered into this Updated Release and the Release Agreement of Employee’s own free will, and that no promises or representations have been made to Employee by any person to induce Employee to enter into this Updated Release and the Release Agreement other than the express terms set forth herein and in the Release Agreement. Employee further acknowledges that Employee has read this Updated Release and the Release Agreement and understands all of their terms, including the waiver and release of claims set forth in this Updated Release and in Section 7 of the Release Agreement.

4.    Under no circumstances should Employee sign or return this Updated Release prior to the Separation Date and any such execution of this Updated Release shall not be effective.

EMPLOYEE UNDERSTANDS AND INTENDS THAT, BY SIGNING THIS UPDATED RELEASE, HE HAS WAIVED ALL CLAIMS AGAINST EMPLOYER AND ITS AFFILIATES, PARENTS, SUBSIDIARIES, RELATED COMPANIES, DIVISIONS AND ITS PAST AND PRESENT OFFICERS, DIRECTORS, EMPLOYEES, AND THE HEIRS, EXECUTORS, ADMINISTRATORS, RECEIVERS, SUCCESSORS AND ASSIGNS OF ALL OF THE FOREGOING AND CERTIFIES THAT HE ENTERS INTO THIS AGREEMENT KNOWINGLY, VOLUNTARILY AND AFTER HAVING SUFFICIENT OPPORTUNITY TO CONSULT WITH HIS ATTORNEY AND TO REVIEW THIS DOCUMENT IN ITS ENTIRETY.

AÉROPOSTALE, INC.
BY:
	NAME:
	TITLE:
	DATE:
BY:
	Thomas P. Johnson
	DATE:

EXHIBIT B

Company Competitors*

American Eagle Outfitters Inc.

Abercrombie & Fitch Co.

Buckle Inc.

Charlotte Russe Holding Inc.

Children’s Place

Gap, Inc.

Hot Topic Inc.

Express Stores

The Gymboree Corporation

New York & Company Inc.

Pacific Sunwear of California Inc.

Tween Brands Inc.

Urban Outfitters Inc.

Wet Seal Inc.

Zumiez, Inc.

*Including all subsidiaries, related companies and affiliates of the companies listed on this

Exhibit A.

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Julian R. Geiger, certify that:

1. I have reviewed this report on Form 10-Q of Aéropostale, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation on internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ JULIAN R. GEIGER

Julian R. Geiger

Chief Executive Officer

(Principal Executive Officer)

Date: December 8, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Marc D. Miller, certify that:

1. I have reviewed this report on Form 10-Q of Aéropostale, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation on internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ MARC D. MILLER

Marc D. Miller

Executive Vice President - Chief Financial Officer

(Principal Financial Officer)

Date: December 8, 2014

EX-32.1

Exhibit 32.1

CERTIFICATE OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

The undersigned, Julian R. Geiger has executed this certificate in connection with the filing with the Securities and Exchange Commission of the Company's report on Form 10-Q for the quarterly period ended November 1, 2014 (the “Report”).

The undersigned hereby certifies that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”); and

2. The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the 8th day of December 2014.

/s/ JULIAN R. GEIGER

Julian R. Geiger

Chief Executive Officer

(Principal Executive Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Exchange Act. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATE OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

The undersigned, Marc D. Miller has executed this certificate in connection with the filing with the Securities and Exchange Commission of the Company's report on Form 10-Q for the quarterly period ended November 1, 2014 (the “Report”).

The undersigned hereby certifies that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”); and

2. The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of the 8th day of December 2014.

/s/ MARC D. MILLER

Marc D. Miller

Executive Vice President - Chief Financial Officer

(Principal Financial Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Exchange Act. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Restructuring Program - Accrued Liabilities for Restructuring (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 01, 2014	Nov. 02, 2013
Restructuring Reserve [Roll Forward]
Liability/Charge at Program Inception			$ 34,489
Additions	1,713	0	4,732	39,221	0
Paid or Utilized			(36,001)
Adjustments			0
Liability as of November 1, 2014	3,220		3,220	3,220
Impairments
Restructuring Reserve [Roll Forward]
Liability/Charge at Program Inception			30,497
Additions			0
Paid or Utilized			(30,497)
Adjustments			0
Liability as of November 1, 2014	0		0	0
Severance
Restructuring Reserve [Roll Forward]
Liability/Charge at Program Inception			1,060
Additions			2,689
Paid or Utilized			(1,435)
Adjustments			0
Liability as of November 1, 2014	2,314		2,314	2,314
Lease Costs
Restructuring Reserve [Roll Forward]
Liability/Charge at Program Inception			1,046
Additions			152
Paid or Utilized			(315)
Adjustments			0
Liability as of November 1, 2014	883		883	883
Other Exit Costs
Restructuring Reserve [Roll Forward]
Liability/Charge at Program Inception			1,886
Additions			1,891
Paid or Utilized			(3,754)
Adjustments			0
Liability as of November 1, 2014	$ 23		$ 23	$ 23

XML

Stock-Based Compensation (Stock-Based Compensation) (Details) (USD $)	0 Months Ended	3 Months Ended	9 Months Ended			3 Months Ended		9 Months Ended				3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended			9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended				3 Months Ended		9 Months Ended				3 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended
	Nov. 13, 2012 GoJane.com, Inc.	Nov. 01, 2014 GoJane.com, Inc.	Nov. 01, 2014 GoJane.com, Inc.	Nov. 02, 2013 GoJane.com, Inc.	Nov. 13, 2012 GoJane.com, Inc. stockholders	Nov. 01, 2014 Restricted Stock Units (RSUs)	Nov. 02, 2013 Restricted Stock Units (RSUs)	Nov. 01, 2014 Restricted Stock Units (RSUs)	Nov. 02, 2013 Restricted Stock Units (RSUs)	Nov. 01, 2014 Restricted Stock Units (RSUs) Minimum	Nov. 01, 2014 Restricted Stock Units (RSUs) Maximum	Nov. 01, 2014 Cash-Settled Restricted Stock Units	Nov. 01, 2014 Cash-Settled Restricted Stock Units	Nov. 01, 2014 Non-vested stock	Nov. 02, 2013 Non-vested stock	Nov. 01, 2014 Non-vested stock	Nov. 02, 2013 Non-vested stock	Oct. 31, 2013 Non-vested stock	Nov. 01, 2014 Performance Shares	Nov. 01, 2014 Performance-based Performance Shares	Nov. 01, 2014 Market-based Performance Shares	Nov. 02, 2013 Market-based Performance Shares	Nov. 01, 2014 Market-based Performance Shares	Nov. 02, 2013 Market-based Performance Shares	Nov. 01, 2014 Employee Stock Option	Nov. 02, 2013 Employee Stock Option	Nov. 01, 2014 Employee Stock Option	Nov. 02, 2013 Employee Stock Option	Nov. 01, 2014 Employee Stock Option Minimum	Nov. 01, 2014 Employee Stock Option Maximum	Nov. 01, 2014 Cash-Settled Stock Appreciation Rights (CSARs)	Nov. 02, 2013 Cash-Settled Stock Appreciation Rights (CSARs)	Nov. 01, 2014 Cash-Settled Stock Appreciation Rights (CSARs)	Nov. 02, 2013 Cash-Settled Stock Appreciation Rights (CSARs)	Nov. 01, 2014 2014 Omnibus Incentive Plan	Jun. 30, 2014 2014 Omnibus Incentive Plan	Aug. 02, 2014 Chief Executive Officer Market-based Performance Shares	Nov. 01, 2014 Chief Executive Officer Employee Stock Option	May 03, 2013 Chief Executive Officer Cash-Settled Stock Appreciation Rights (CSARs)	Nov. 01, 2014 Chief Executive Officer Standard Performance Bonus Award	Nov. 01, 2014 Chief Executive Officer Qualifying Event Performance Bonus Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share reserve increase for incentive plan (in shares)																																				5,900,000
Common stock total shares reserved for incentive plan																																				6,113,891
Shares outstanding under incentive plan																																			4,863,305
Share-based compensation arrangement by share-based payment award, equity instruments granted																																							$ 5,600,000
Vesting period of subsequent grants of non-vested stock to directors (in years)																1 year
Compensation expense						200,000	0	1,900,000	0			400,000	1,100,000	2,000,000	2,400,000	5,700,000	10,000,000				(1,500,000)	600,000	200,000	1,400,000	200,000	100,000	200,000	100,000			(100,000)	(100,000)	(300,000)	400,000			(2,000,000)
Performance based bonus, threshold consecutive trading days																																								90 days	30 days
Performance based bonus, stock price trigger																																								$ 15.93	$ 3.24
Performance based bonus, percent of average market capitalization during period																																								2.00%	2.00%
Share-based Compensation, Effective Date Market Capitalization																																								255,360,600
Forfeited awards																															66.66%
Unrecognized compensation cost						400,000		400,000				2,200,000	2,200,000	6,900,000		6,900,000				0	3,200,000		3,200,000		2,800,000		2,800,000
Recognition period for unrecognized compensation cost						1 year							2 years			1 year				0 years			2 years				3 years
Fair value of shares vested of other-than-option awards						2,400,000	0	2,500,000	0					1,500,000	100,000	9,800,000	7,700,000
Vesting period	3 years									1 year	3 years		3 years			3 years			3 years								4 years				3 years							3 years
Minimum qualified retirement age								65 years					65 years			65 years
Years of service required for early retirement								10 years					10 years			10 years
Minimum qualified early retirement age								55 years					55 years			55 years
Award term																											8 years				7 years							7 years
Award vesting percentage																															33.33%
Business acquisition, contingent consideration, restricted shares	8,000,000
Acquisition restricted shares expense		600,000	2,600,000	700,000
Compensation liability		4,000,000	4,000,000	700,000
Rescission in Shares																		229,760
Rescission Value																		$ 1,000,000
Number of individual stockholders of acquired business					2
Award vesting after change in control of Company, period																											1 year
Number of expired shares included in cancelled options																											105,000
Granted																											2,030,000											2,000,000
Granted, weighted average price per share																											$ 3.24											$ 3.24
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected volatility rate																													52.80%	56.10%	64.00%
Expected term (in years)																													3 years 11 months 16 days	5 years	9 months 26 days
Risk free interest rate																													1.17%	1.58%	0.09%
Forfeiture rate																											0.00%				0.00%

XML

Accrued Expenses and Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Accrued Liabilities and Other Liabilities [Abstract]
Accrued gift cards	$ 17,030	$ 27,783	$ 21,076
Accrued compensation and retirement benefit plan liabilities	22,014	16,939	10,928
Current portion of tenant allowances	14,057	0	0
Other	46,218	57,394	54,640
Total accrued expenses and other current liabilities	$ 99,319	$ 102,116	$ 86,644

XML

Stock-Based Compensation (Shares of Stock Outstanding) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Nov. 01, 2014
Restricted Stock Units (RSUs)
Shares
Outstanding as of February 2, 2014	230
Granted	322
Vested	(419)
Canceled	0
Outstanding as of November 1, 2014	133
Weighted Average Grant-Date Fair Value
Outstanding as of February 2, 2014	$ 9.05
Granted	$ 4.81
Vested	$ 6.02
Canceled	$ 0.00
Outstanding as of November 1, 2014	$ 8.34
Cash-Settled Restricted Stock Units
Shares
Outstanding as of February 2, 2014	0
Granted	1,219
Vested	0
Canceled	(103)
Outstanding as of November 1, 2014	1,116
Weighted Average Grant-Date Fair Value
Outstanding as of February 2, 2014	$ 0.00
Granted	$ 3.01
Vested	$ 0.00
Canceled	$ 3.01
Outstanding as of November 1, 2014	$ 3.01
Non-vested stock
Shares
Outstanding as of February 2, 2014	1,856
Granted	299
Vested	(533)
Canceled	(109)
Outstanding as of November 1, 2014	1,513
Weighted Average Grant-Date Fair Value
Outstanding as of February 2, 2014	$ 14.82
Granted	$ 4.50
Vested	$ 18.44
Canceled	$ 12.07
Outstanding as of November 1, 2014	$ 11.70
Performance-based Performance Shares
Shares
Outstanding as of February 2, 2014	0
Granted	0
Vested	0
Canceled	0
Outstanding as of November 1, 2014	0
Weighted Average Grant-Date Fair Value
Outstanding as of February 2, 2014	$ 0.00
Granted	$ 0.00
Vested	$ 0.00
Canceled	$ 0.00
Outstanding as of November 1, 2014	$ 0.00
Market-based Performance Shares
Shares
Outstanding as of February 2, 2014	391
Granted	676
Vested	0
Canceled	(528)
Outstanding as of November 1, 2014	539
Weighted Average Grant-Date Fair Value
Outstanding as of February 2, 2014	$ 20.01
Granted	$ 5.34
Vested	$ 0.00
Canceled	$ 11.06
Outstanding as of November 1, 2014	$ 10.37

XML

Stockholders' Equity - Reclassification out of Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax expense			$ 0	$ (645)
Accumulated Defined Benefit Plans Adjustment [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax expense			0	(645)
Accumulated Defined Benefit Plans Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net gain	3,633	739	3,633	739
Amortization of loss	6	68	69	241
Amortization of prior service cost	18	18	56	56
Settlement loss	0	577	0	577
Total before tax	3,657	1,402	3,758	1,613
Tax expense	0	(561)	0	(645)
Net of tax	$ 3,657	$ 841	$ 3,758	$ 968

XML

Segment Information (Tables)

9 Months Ended

Nov. 01, 2014

Segment Reporting [Abstract]

Schedule of net sales by segment

The following tables provide summary financial data for each of our segments (in thousands):

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
Net sales:
Retail stores and e-commerce	$	442,906	$	508,813	$	1,219,668	$	1,407,700
International licensing	9,983		5,775		25,234		13,195
Total net sales	$	452,889	$	514,588	$	1,244,902	$	1,420,895

Schedule of (loss) income from operations by segment

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Loss from operations:
Retail stores and e-commerce 1	$	(43,839	)	$	(41,369	)	$	(140,191	)	$	(101,118	)
International licensing	9,253			5,388			23,048			12,070
Other 2	(19,499		)	(5,053		)	(82,030		)	(16,284		)
Total loss from operations	$	(54,085	)	$	(41,034	)	$	(199,173	)	$	(105,332	)

¹ Such amounts include all corporate overhead and shared service function costs. We have not allocated a portion of these costs to international licensing in this presentation to be consistent with how the CODM reviews the results.

² Other items for the third quarter and first thirty-nine weeks of 2014, which are all related to the retail stores and e-commerce segment, included restructuring charges (See Note 3), store asset impairment charges (See Note 4) and other income (charges) that are not included in the segment income (loss) from operations reviewed by the CODM. Other items for the third quarter of 2013 and first thirty-nine weeks of 2013 included store asset impairment and other charges.

Schedule of assets by segment

	November 1, 2014		February 1, 2014		November 2, 2013
Total assets:
Retail stores and e-commerce	$	567,032	$	637,927	$	734,083
International licensing	11,292		9,714		8,230
Total assets	$	578,324	$	647,641	$	742,313

XML

Commitments and Contingent Liabilities (Details) (USD $)	0 Months Ended	9 Months Ended	0 Months Ended			9 Months Ended			0 Months Ended
	May 23, 2014	Nov. 01, 2014	May 23, 2014 Minimum	May 23, 2014 Maximum	Nov. 01, 2014 Standby Letter of Credit	Nov. 01, 2014 California Wage and Hour Matters [Member]	Nov. 01, 2014 Loan Agreement	May 23, 2014 Loan Agreement	Aug. 18, 2014 Chief Executive Officer
Guarantor Obligations [Line Items]
Litigation settlement charges		$ 15,000,000
Payment for legal settlement						3,600,000
Estimated litigation liability						800,000
Face amount of debt							150,000,000.0	150,000,000.0
Term of purchase obligation	10 years
Amount of guaranteed minimum product purchase commitment			240,000,000	280,000,000
Outstanding letter of credit					200,000
Employment agreement contract term									3 years
Employment agreement annual salary									$ 1,500,000

XML

Restructuring Program (Tables)

9 Months Ended

Nov. 01, 2014

Restructuring Costs [Abstract]

Restructuring and Related Costs

The following is a summary of expenses incurred during the third quarter of 2014 and the first thirty-nine weeks of 2014 associated with the above ongoing actions:

	13 weeks ended		39 weeks ended
	November 1, 2014
	(In thousands)
Severance	$	1,236	$	3,749
Lease costs	146		1,198
Impairment	—		30,497
Other exit costs	331		3,777
Total	$	1,713	$	39,221

The Company accrued liabilities for the above mentioned restructuring charges as of November 1, 2014, which are expected to be paid during fiscal 2014 as follows:

	Impairments			Severance			Lease Costs			Other Exit Costs			Total
	(In thousands)
Liability/Charge at Program Inception	$	30,497		$	1,060		$	1,046		$	1,886		$	34,489
Additions	—			2,689			152			1,891			4,732
Paid or Utilized	(30,497		)	(1,435		)	(315		)	(3,754		)	(36,001		)
Adjustments	—			—			—			—			—
Liability as of November 1, 2014	$	—		$	2,314		$	883		$	23		$	3,220

XML

Revolving Credit Facility (Details) (USD $)	9 Months Ended						9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Feb. 01, 2014	Nov. 01, 2014 Standby Letter of Credit	Nov. 01, 2014 Standby Letter of Credit Bank of America Credit Facility	Sep. 30, 2011 Previous Revolving Credit Facility	Nov. 01, 2014 Revolving Credit Facility	Feb. 21, 2014 Revolving Credit Facility	Feb. 01, 2014 Revolving Credit Facility	Feb. 21, 2014 First Amendment to Facility	Feb. 21, 2014 First-In, Last-Out Revolving Loan Facility	Feb. 21, 2014 Increase in Existing Facility	Feb. 21, 2014 Letter of Credit	Sep. 30, 2011 Previous Accordion Feature	Feb. 21, 2014 Accordion Feature	Nov. 01, 2014 Loan Agreement	May 23, 2014 Loan Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity on revolving credit line						$ 175,000,000.0		$ 200,000,000		$ 230,000,000.0	$ 30,000,000.00	$ 25,000,000.0	$ 40,000,000.0	$ 75,000,000	$ 50,000,000
Repayments under revolving credit facility	75,500,000	0					75,500,000
Face amount of debt																150,000,000.0	150,000,000.0
Credit availability threshold	12.50%
Maintenance minimum percent of borrowing base or commitments	10.00%
Amount outstanding under revolving credit facility	0		0				0		0
Remaining borrowing capacity	173,600,000
Outstanding letter of credit				$ 200,000	$ 200,000

XML

Fair Value Measurements - Significant Unobservable Inputs (Level 3) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013
GJ Performance Plan
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 7,416	$ 7,019
Accretion of interest expense	99	331
GoJane consideration payment	(1,600)	0
Balance at end of period		7,350
Exit Costs Obligations
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	0	0
Fair value of exit costs obligations at cease-use date	3,009	0
Accretion of rent expense	245	0
Payments	(365)	0
Balance at end of period	$ 2,889	$ 0

XML

Restructuring Program - Narrative (Details) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended				3 Months Ended	9 Months Ended		6 Months Ended			3 Months Ended	9 Months Ended		0 Months Ended		0 Months Ended
	Apr. 30, 2014 position Stores	Nov. 01, 2014 Stores	Nov. 02, 2013	Nov. 01, 2014 Stores	Nov. 01, 2014 Stores	Nov. 02, 2013	Apr. 30, 2014 Stores	Nov. 01, 2014 Accrued Expenses and Other Current Liabilities	Nov. 01, 2014 Consulting and severance	Nov. 01, 2014 Consulting and severance	Apr. 30, 2014 Consulting and severance	Nov. 01, 2014 Impairment	May 03, 2014 Impairment	Apr. 30, 2014 Impairment	Nov. 01, 2014 Additional severance resulting from store closures	Nov. 01, 2014 Additional severance resulting from store closures	Apr. 30, 2014 Additional severance resulting from store closures	Apr. 30, 2014 Minimum	Apr. 30, 2014 Minimum	Apr. 30, 2014 Maximum	Apr. 30, 2014 Maximum
Restructuring Cost and Reserve [Line Items]
Expected stores closed							125
Number of stores closed, inception to date		11		11	11
Positions eliminated	100
Expected cost											$ 5,500,000		$ 30,500,000				$ 4,000,000		$ 40,000,000		$ 65,000,000
Expected cost in cash																		25,000,000		40,000,000
Restructuring charges		1,713,000	0	4,732,000	39,221,000	0			400,000	5,100,000		0			1,200,000	2,500,000
Restructuring liability		$ 3,220,000		$ 3,220,000	$ 3,220,000		$ 34,489,000	$ 2,700,000				$ 0		$ 30,497,000

XML

Retirement Benefit Plans (Details) (USD $)				9 Months Ended				1 Months Ended	3 Months Ended			3 Months Ended
	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013	Nov. 01, 2014 Defined Contribution Pension [Member]	Nov. 01, 2014 Deferred Compensation, Excluding Share-based Payments and Retirement Benefits [Member]	Feb. 01, 2014 Deferred Compensation, Excluding Share-based Payments and Retirement Benefits [Member]	Nov. 02, 2013 Deferred Compensation, Excluding Share-based Payments and Retirement Benefits [Member]	Sep. 30, 2013 Supplemental Employee Retirement Plan	Nov. 02, 2013 Supplemental Employee Retirement Plan	Nov. 01, 2014 Supplemental Employee Retirement Plan	Feb. 01, 2014 Supplemental Employee Retirement Plan	Nov. 02, 2013 Accumulated Other Comprehensive Income (Loss) [Member] Supplemental Employee Retirement Plan	May 02, 2015 Forecast Chief Executive Officer Supplemental Employee Retirement Plan	May 02, 2015 Forecast Selling, General and Administrative Expenses Chief Executive Officer Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Percentage of employee gross earnings that may be contributed to plan, maximum				100.00%
Employer matching contribution				50.00%
Percentage of employee gross earnings that employer will provide a match for, maximum				5.00%
Defined contribution plan employer matching contribution vesting period maximum				5 years
Vesting percentage after two years				20.00%
Vesting percentage after three years				50.00%
Percentage of vesting increase per year thereafter until fully vested				25.00%
Period of service in which participants become fully vested upon retirement (in years)					5 years
Benefits paid													$ 5,800,000
Estimated benefit recorded after payment														900,000
Cost recognized								2,200,000	600,000			400,000
Vesting period for incentive deferred compensation plan (in years)					3 years
Minimum age of participant becoming fully vested (in years)					55 years
Retirement benefit plan liabilities	$ 11,651,000	$ 14,601,000	$ 14,172,000		$ 4,000,000	$ 3,900,000	$ 3,600,000		$ 10,434,000	$ 7,511,000	$ 10,551,000

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Loss Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Earnings Per Share [Abstract]
Net loss	$ (52,323)	$ (25,623)	$ (192,924)	$ (71,525)
Weighted average basic shares	79,015	78,488	78,775	78,442
Impact of dilutive securities	0	0	0	0
Weighted average diluted shares	79,015	78,488	78,775	78,442
Basic loss per share (usd per share)	$ (0.66)	$ (0.33)	$ (2.45)	$ (0.91)
Diluted loss per share (usd per share)	$ (0.66)	$ (0.33)	$ (2.45)	$ (0.91)

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Description of Business

9 Months Ended

Nov. 01, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of Business

Aéropostale, Inc. and its subsidiaries (“we”, “us”, “our”, the “Company” or “Aéropostale”) is a primarily mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men through its Aéropostale stores and 4 to 12 year-olds through its P.S. from Aéropostale stores.  We provide customers with a focused selection of high quality fashion and fashion basic merchandise at compelling values in an exciting and customer friendly store environment.  Aéropostale maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise.  Aéropostale products can be purchased in Aéropostale stores and online at www.aeropostale.com (this and any other references in this Quarterly Report on Form 10-Q to www.aeropostale.com or www.ps4u.com are solely references to a uniform resource locator, or URL, and are inactive textual references only, not intended to incorporate the websites into this Quarterly Report on Form 10-Q).  P.S. from Aéropostale products can be purchased in P.S. from Aéropostale stores, certain Aéropostale stores and online at www.ps4u.com.  As of November 1, 2014, we operated 911 Aéropostale stores, consisting of 842 stores in all 50 states and Puerto Rico, 69 stores in Canada, as well as 141 P.S. from Aéropostale stores in 32 states and Puerto Rico. Since November 2012, our Company acquired and now operates GoJane.com, Inc. (“GoJane”), an online women's fashion footwear and apparel retailer. In addition, pursuant to various licensing agreements, our licensees operated 220 Aéropostale locations and one Aéropostale and P.S. from Aéropostale combination location in the Middle East, Asia, Europe and Latin America as of November 1, 2014. We recently signed licensing agreements in Chile for both Aéropostale and P.S. from Aéropostale locations. Additionally, we recently signed a licensing agreement in Mexico that will allow our licensee to operate P.S. from Aéropostale locations.

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Fair Value Measurements - Fair Value of Long-Lived Assets, Impairment Recognized (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used, total losses	$ 5,100	$ 64,611	$ 13,624
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used, total fair value	5,431	6,488	5,431
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used, total fair value	0	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used, total fair value	0	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used, total fair value	$ 5,431	$ 6,488	$ 5,431

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Nov. 01, 2014

Accrued Liabilities and Other Liabilities [Abstract]

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Accrued gift cards	$	17,030	$	27,783	$	21,076
Accrued compensation and retirement benefit plan liabilities	22,014		16,939		10,928
Current portion of tenant allowances	14,057		—		—
Other	46,218		57,394		54,640
Total accrued expenses and other current liabilities	$	99,319	$	102,116	$	86,644

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Loss Per Share (Tables)

9 Months Ended

Nov. 01, 2014

Earnings Per Share [Abstract]

Computations of basic and diluted earnings per share

The following table sets forth the computations of basic and diluted loss per share:

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
	(In thousands, except per share data)
Net loss	$	(52,323	)	$	(25,623	)	$	(192,924	)	$	(71,525	)
Weighted average basic shares	79,015			78,488			78,775			78,442
Impact of dilutive securities	—			—			—			—
Weighted average diluted shares	79,015			78,488			78,775			78,442
Basic loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)
Diluted loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)

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Stock-Based Compensation (Stock Option Transactions for Common Stock) (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	9 Months Ended
	Nov. 01, 2014
Employee Stock Option
Number of Shares
Outstanding as of February 2, 2014	377
Granted	2,030
Exercised	0
Canceled	(110)
Outstanding as of November 1, 2014	2,297
Options vested and expected to vest (in shares)	2,297
Exercisable (in shares)	262
Weighted Average Exercise Price
Outstanding as of February 2, 2014	$ 16.61
Granted	$ 3.24
Exercised	$ 0.00
Canceled	$ 13.84
Outstanding as of November 1, 2014	$ 4.93
Weighted average exercise price, options vested and expected to vest (in dollars per share)	$ 4.93
Weighted average exercisable (in dollars per share)	$ 17.78
Weighted-Average Remaining Contractual Term
Outstanding as of November 1, 2014	2 years 7 months 17 days
Options vested as of November 1, 2014 and expected to vest	2 years 7 months 17 days
Exercisable as of November 1, 2014	9 months
Aggregate Intrinsic Value
Outstanding as of November 1, 2014	$ 0
Options vested as of November 1, 2014 and expected to vest	0
Exercisable as of November 1, 2014	$ 0
Non-vested Stock Options
Number of Shares
Outstanding as of February 2, 2014	10
Granted	2,030
Vested	0
Canceled	(5)
Outstanding as of November 1, 2014	2,035
Weighted Average Exercise Price
Outstanding as of February 2, 2014	$ 6.41
Granted	$ 3.24
Vested	$ 0.00
Canceled	$ 6.43
Outstanding as of November 1, 2014	$ 3.25

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Stockholders' Equity (Details) (USD $)	9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Feb. 01, 2014	Nov. 26, 2013	Feb. 02, 2013
Stockholders' Equity Note [Abstract]
Number of rights issued for each common stock share				1
Common stock par value (usd per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Stock repurchased during period (shares)	0	0
Total number of shares repurchased (in shares)	60,100,000
Total amount paid for common stock repurchased under the plan to date	$ 1,000,000,000
Amount of remaining authorization under repurchase program	104,400,000
Total share repurchase authorized	1,150,000,000
Minimum statutory withholding taxes (in shares)	354,000
Minimum statutory withholding taxes	1,500,000
Pension liability, net of tax	1,751,000	(1,573,000)	(2,007,000)
Cumulative foreign currency translation adjustment	889,000	1,593,000	824,000
Total accumulated other comprehensive loss	$ 2,640,000	$ 20,000	$ (1,183,000)		$ 190,000

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Other Non-current Liabilities (Tables)

9 Months Ended

Nov. 01, 2014

Other Liabilities Disclosure [Abstract]

Schedule of Non-current Liabilities

Other non-current liabilities consist of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Deferred rent	$	43,685	$	46,831	$	47,153
Deferred tenant allowance	29,515		51,189		54,613
Retirement benefit plan liabilities	5,841		14,339		14,172
Uncertain tax contingency liabilities	2,075		3,702		3,343
Other	14,650		10,527		9,700
Total other non-current liabilities	$	95,766	$	126,588	$	128,981

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Retirement Benefit Plans (Tables)

9 Months Ended

Nov. 01, 2014

Compensation and Retirement Disclosure [Abstract]

Retirement Benefit Plan Liabilities

Retirement benefit plan liabilities consisted of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Supplemental Executive Retirement Plan (“SERP”)	$	7,511	$	10,551	$	10,434
Other retirement plan liabilities	4,140		4,050		3,738
Total	$	11,651	$	14,601	$	14,172
Less amount classified in accrued expenses related to SERP	5,810		—		—
Less amount classified in accrued expenses related to other retirement plan liabilities	—		262		—
Long-term retirement benefit plan liabilities	$	5,841	$	14,339	$	14,172

Components of Net Periodic Pension Benefit Cost

The components of net periodic pension benefit cost are as follows:

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
	(In thousands)
Service cost	$	55	$	131	$	314	$	397
Interest cost	76		108		279		328
Amortization of prior experience cost	18		18		55		56
Amortization of net loss	6		69		68		241
Net periodic pension benefit cost	$	155	$	326	$	716	$	1,022

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (192,924)	$ (71,525)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	39,388	47,281
Asset impairment charges	64,612	13,624
Amortization of intangible assets	564	564
Stock-based compensation	11,495	11,857
Other	(1,325)	(4,733)
Changes in operating assets and liabilities:
Merchandise inventory	(39,013)	(107,564)
Income taxes receivable and other assets	29,604	(48,302)
Accounts payable	5,136	90,030
Accrued expenses and other liabilities	(19,090)	(24,723)
Net cash used in operating activities	(101,553)	(93,491)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(21,127)	(68,013)
Change in restricted cash	(2,210)	0
Final working capital adjustment related to the acquisition of GoJane.com, Inc.	0	(381)
Net cash used in investing activities	(23,337)	(68,394)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	0	219
Net proceeds from financing transaction with related party	137,648	0
Borrowings under revolving credit facility	75,500	0
Repayments under revolving credit facility	(75,500)	0
Fees related to financing transaction with related party	(6,165)	0
GoJane contingent consideration payment	(1,531)	0
Financing fees related to revolving credit facility	(687)	0
Purchase of treasury stock	(1,466)	(1,581)
Net cash provided by (used in) financing activities	127,799	(1,362)
Effect of exchange rate changes	(228)	(236)
Net increase (decrease) in cash and cash equivalents	2,681	(163,483)
Cash and cash equivalents, beginning of year	106,517	231,501
Cash and cash equivalents, end of period	$ 109,198	$ 68,018

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Stock-Based Compensation (Tables)

9 Months Ended

Nov. 01, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of share-settled restricted stock units

The following table summarizes share-settled restricted stock units outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	230		$	9.05
Granted	322		4.81
Vested	(419	)	6.02
Canceled	—		—
Outstanding as of November 1, 2014	133		$	8.34

Schedule of cash-settled restricted stock units

The following table summarizes cash-settled restricted stock units outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	—		$	—
Granted	1,219		3.01
Vested	—		—
Canceled	(103	)	3.01
Outstanding as of November 1, 2014	1,116		$	3.01

Summary of non-vested shares of stock outstanding

The following table summarizes non-vested shares of stock outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	1,856		$	14.82
Granted	299		4.50
Vested	(533	)	18.44
Canceled	(109	)	12.07
Outstanding as of November 1, 2014	1,513		$	11.70

Summary of performance shares of stock outstanding

The following table summarizes performance shares of stock outstanding as of November 1, 2014:

	Performance-based			Market-based
	Performance Shares			Performance Shares
	Shares	Weighted Average Grant-Date Fair Value		Shares		Weighted Average Grant-Date Fair Value
	(In thousands)			(In thousands)
Outstanding as of February 2, 2014	—	$	—	391		$	20.01
Granted	—	—		676		5.34
Vested	—	—		—		—
Canceled	—	—		(528	)	11.06
Outstanding as of November 1, 2014	—	$	—	539		$	10.37

Schedule of unrecognized compensation for performance shares

The following table summarizes unrecognized compensation cost and the weighted-average years expected to be recognized related to performance share awards outstanding as of November 1, 2014:

	Performance-based		Market-based
	Performance Shares		Performance Shares
Total unrecognized compensation (in millions)	$	—	$	3.2
Weighted-average years expected to be recognized over (years)	0		2

Stock options activity table

The following table summarizes stock option transactions for common stock during the first thirty-nine weeks of 2014:

	Number of Shares		Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In millions)
Outstanding as of February 2, 2014	377		$	16.61
Granted	2,030		3.24
Exercised	—		—
Canceled1	(110	)	13.84
Outstanding as of November 1, 2014	2,297		$	4.93	2.63	$	—
Options vested as of November 1, 2014 and expected to vest2	2,297		$	4.93	2.63	$	—
Exercisable as of November 1, 2014	262		$	17.78	0.75	$	—

¹ The number of options canceled includes approximately 105,000 expired shares.

² The number of options expected to vest takes into consideration estimated expected forfeitures.

Summary of information regarding non-vested outstanding options

The following table summarizes information regarding non-vested outstanding stock options as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Non-vested as of February 2, 2014	10		$	6.41
Granted	2,030		3.24
Vested	—		—
Canceled	(5	)	6.43
Non-vested as of November 1, 2014	2,035		$	3.25

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Fair Value Measurements - Narrative (Details) (USD $)	3 Months Ended		9 Months Ended			3 Months Ended	9 Months Ended	0 Months Ended
	Nov. 01, 2014 Stores	Nov. 02, 2013 Stores	Nov. 01, 2014 Stores	Nov. 02, 2013 Stores	Nov. 01, 2014 Restructuring Charges	Nov. 01, 2014 Cost of Sales	Nov. 01, 2014 Cost of Sales	Nov. 13, 2012 GoJane.com, Inc. stockholders	Feb. 01, 2014 GJ Performance Plan	Nov. 02, 2013 GJ Performance Plan	Feb. 02, 2013 GJ Performance Plan	Nov. 02, 2013 GJ Performance Plan Accrued Expenses and Other Current Liabilities	Nov. 01, 2014 GJ Performance Plan Other Noncurrent Liabilities	Nov. 01, 2014 Exit Costs Obligations	Feb. 01, 2014 Exit Costs Obligations	Nov. 02, 2013 Exit Costs Obligations	Feb. 02, 2013 Exit Costs Obligations	Nov. 01, 2014 Exit Costs Obligations Accrued Expenses and Other Current Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business acquisition, cost of contingent consideration								$ 8,000,000.0
Duration for contingent consideration								5 years
Number of individual stockholders of acquired business								2
Contingent consideration recognized								7,000,000
Escrow deposit	2,400,000		2,400,000
Exit cost obligation related to the real estate taxes at fair value	2,000,000		2,000,000
Exit cost obligation on lease costs	1,000,000		1,000,000
Liability value									7,416,000	7,350,000	7,019,000	1,600,000	5,915,000	2,889,000	0	0	0	800,000
Long-lived assets held and used, total losses		$ 5,100,000	$ 64,611,000	$ 13,624,000	$ 30,500,000	$ 12,500,000	$ 34,100,000
Number of stores impaired	59	25	277	72

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Retirement Benefit Plans Net periodic pension benefit cost (Details) (Supplemental Employee Retirement Plan, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 55	$ 131	$ 314	$ 397
Interest cost	76	108	279	328
Amortization of prior experience cost	18	18	55	56
Amortization of net loss	6	69	68	241
Net periodic pension benefit cost	$ 155	$ 326	$ 716	$ 1,022

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Current Assets:
Cash and cash equivalents	$ 109,198	$ 106,517	$ 68,018
Merchandise inventory	211,136	172,311	262,587
Income taxes receivable	9,198	50,388	42,021
Prepaid expenses and other current assets	47,958	47,405	60,552
Total current assets	377,490	376,621	433,178
Fixtures, equipment and improvements, net	151,196	235,401	274,402
Goodwill	13,919	13,919	13,919
Intangible assets, net	14,097	14,661	14,849
Other assets	21,622	7,039	5,965
TOTAL ASSETS	578,324	647,641	742,313
Current Liabilities:
Accounts payable	143,354	138,245	179,821
Accrued expenses and other current liabilities	99,319	102,116	86,644
Total current liabilities	242,673	240,361	266,465
Indebtedness to related party - non-current (See Note 3)	136,042	0	0
Other non-current liabilities	95,766	126,588	128,981
Commitments and contingent liabilities (See Notes 3, 5, 10, 11, 12 and 13)
Stockholders’ Equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; 1; 0 and 0 shares issued or outstanding	0	0	0
Common stock, $0.01 par value; 200,000 shares authorized; 79,568; 78,616 and 78,608 shares issued	796	786	786
Additional paid-in capital	244,910	231,202	225,843
Accumulated other comprehensive loss	2,640	(1,183)	20
Accumulated (deficit) earnings	(141,431)	51,493	121,799
Treasury stock 472; 118 and 114 shares, at cost	(3,072)	(1,606)	(1,581)
Total stockholders’ equity	103,843	280,692	346,867
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 578,324	$ 647,641	$ 742,313

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Stockholders' Equity - Components of Accumulated other Comprehensive (Loss) Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			$ (1,183)	$ 190
Other comprehensive income before reclassifications			65	(1,138)
Reclassified from accumulated other comprehensive income			3,758	1,613
Tax effect on pension liability			0	(645)
Other comprehensive income (loss)	3,627	776	3,823	(170)
Ending balance	2,640	20	2,640	20
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(2,007)	(2,541)
Other comprehensive income before reclassifications			0	0
Reclassified from accumulated other comprehensive income			3,758	1,613
Tax effect on pension liability			0	(645)
Other comprehensive income (loss)			3,758	968
Ending balance	1,751	(1,573)	1,751	(1,573)
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			824	2,731
Other comprehensive income before reclassifications			65	(1,138)
Reclassified from accumulated other comprehensive income			0	0
Tax effect on pension liability			0	0
Other comprehensive income (loss)			65	(1,138)
Ending balance	$ 889	$ 1,593	$ 889	$ 1,593

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ (52,323)	$ (25,623)	$ (192,924)	$ (71,525)
Other comprehensive income (loss):
Pension liability, net of income taxes of $0, $561, $0 and $645, respectively	3,658	840	3,758	968
Foreign currency translation adjustment (See Note 6)	(31)	(64)	65	(1,138)
Other comprehensive income (loss)	3,627	776	3,823	(170)
Comprehensive loss	$ (48,696)	$ (24,847)	$ (189,101)	$ (71,695)

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014 segment	Nov. 02, 2013	Feb. 01, 2014
Segment Reporting Information [Line Items]
Number of reportable segments			2
Total net sales	$ 452,889	$ 514,588	$ 1,244,902	$ 1,420,895
Total loss from operations	(54,085)	(41,034)	(199,173)	(105,332)
Total assets	578,324	742,313	578,324	742,313	647,641
Retail stores and e-commerce
Segment Reporting Information [Line Items]
Total net sales	442,906	508,813	1,219,668	1,407,700
Total loss from operations	(43,839)	(41,369)	(140,191)	(101,118)
Total assets	567,032	734,083	567,032	734,083	637,927
International licensing
Segment Reporting Information [Line Items]
Total net sales	9,983	5,775	25,234	13,195
Total loss from operations	9,253	5,388	23,048	12,070
Total assets	11,292	8,230	11,292	8,230	9,714
Other
Segment Reporting Information [Line Items]
Total loss from operations	$ (19,499)	$ (5,053)	$ (82,030)	$ (16,284)

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Closing of $150.0 Million Financing Transaction (Details) (USD $)	0 Months Ended	3 Months Ended	9 Months Ended
	May 23, 2014 unit_of_accounting	Nov. 01, 2014	Nov. 01, 2014	Nov. 02, 2013	Feb. 01, 2014
Debt Instrument [Line Items]
Preferred stock, par value (usd per share)		$ 0.01	$ 0.01	$ 0.01	$ 0.01
Number of units of accounting or elements included in arrangement	4
Net proceeds from financing transaction with related party			$ 137,648,000	$ 0
Indebtedness to related party - non-current (See Note 3)		136,042,000	136,042,000	0	0
Related party interest expense		2,700,000	4,800,000
Loan Agreement
Debt Instrument [Line Items]
Face amount of debt		150,000,000.0	150,000,000.0
Net proceeds from financing transaction with related party	137,600,000
Loan Agreement | Tranche A Facility
Debt Instrument [Line Items]
Face amount of debt		100,000,000.0	100,000,000.0
Expiration period	5 years
Percent of principal amount prepaid on or before first anniversary of the closing date	10.00%
Prepayment requirement percent of principal amount prepaid on or before second anniversary of the closing date	5.00%
Indebtedness to related party - non-current (See Note 3)		105,000,000	105,000,000
Loan Agreement | Tranche B Facility
Debt Instrument [Line Items]
Face amount of debt		50,000,000.0	50,000,000.0
Expiration period	10 years
Percent of loan to be repaid in equal annual installments	10.00%
Indebtedness to related party - non-current (See Note 3)		31,000,000	31,000,000
Series B Preferred Stock
Debt Instrument [Line Items]
Stock issued during period (shares)	1,000
Conversion rate	3,932.018
Expected term	10 years
Risk free interest rate	2.54%
Expected volatility rate	50.00%
Value of new shares issued	100,000
Fair value of preferred stock	$ 5,900,000
Affiliated Entity
Debt Instrument [Line Items]
Common stock ownership percentage by related party	8.00%

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Income Taxes

9 Months Ended

Nov. 01, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We review the annual effective tax rate on a quarterly basis and make necessary changes if information or events merit.  The estimated annual effective tax rate is forecasted quarterly using actual historical information and forward-looking estimates.  The estimated annual effective tax rate may fluctuate due to changes in forecasted annual operating income; changes to the valuation allowance for deferred tax assets; changes to actual or forecasted permanent book to tax differences (non-deductible expenses); impacts from future tax settlements with state, federal or foreign tax authorities (such changes would be recorded discretely in the quarter in which they occur), or impacts from tax law changes.  To the extent such changes impact our deferred tax assets/liabilities, these changes would generally be recorded discretely in the quarter in which they occur. During the third quarter of 2014, we recorded a tax benefit of approximately $7.1 million related to the carryback of certain NOL’s due to tax accounting method changes filed in the third quarter and the release of reserves for uncertain tax benefits due to a favorable audit resolution. During the first thirty-nine weeks of 2014, we recorded a net discrete benefit of approximately $2.7 million. This net tax benefit was the result of tax expense of approximately $4.4 million to reduce certain state deferred tax assets, primarily resulting from the planned closures of the mall-based P.S. from Aéropostale stores offset by the above mentioned $7.1 million in discrete tax benefit recorded in the third quarter which is discussed above.

We follow the provisions of ASC Topic 740, “Income Taxes”, which includes the accounting and disclosure for uncertainty in income taxes.  We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. Uncertain tax positions, inclusive of interest and penalties were $8.2 million as of November 1, 2014, $9.9 million at February 1, 2014, and $3.3 million at November 2, 2013.  Of these amounts, $6.2 million was recorded as a direct reduction of the related deferred tax assets as of November 1, 2014 and February 1, 2014. During the third quarter of 2014 we released $0.8 million of reserves due to a favorable audit resolution within the quarter. This reversal of uncertain tax positions, along with reversal of related deferred tax assets, favorably impacts our effective tax rate. These uncertain tax positions are subject to change based on future events, the timing of which is uncertain, however the Company does not anticipate that the balance of such uncertain tax positions will significantly decrease during the next twelve months.

We file income tax returns in the U.S. and in various states, Canada and Puerto Rico. All tax returns remain open for examination generally for our 2010 through 2013 tax years by various taxing authorities. However, certain states may keep their statute open for six to ten years.

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Closing of $150.0 Million Financing Transaction Non-Exclusive Sourcing Agreement (Details) (USD $)	0 Months Ended
	May 23, 2014
Long-term Purchase Commitment [Line Items]
Term of purchase obligation	10 years
Notice period of sourcing agreement termination	9 months
Minimum period before sourcing agreement can be terminated	3 years
Maximum
Long-term Purchase Commitment [Line Items]
Amount of guaranteed minimum product purchase commitment	$ 280,000,000
Minimum
Long-term Purchase Commitment [Line Items]
Amount of guaranteed minimum product purchase commitment	$ 240,000,000

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Recent Accounting Developments

9 Months Ended

Nov. 01, 2014

Accounting Policies [Abstract]

Recent Accounting Developments

Recent Accounting Developments

In August, 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"). Itaddresses financial reporting considerations about an entity’s ability to continue as a going concern. Under ASU 2014-15, management is required to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if “conditions or events raise substantial doubt about [the] entity’s ability to continue as a going concern.” The new standard applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Management is still assessing the impact of the adoption to the unaudited condensed consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ASU 2014-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Management is still assessing the impact of the adoption to the unaudited condensed consolidated financial statements.

In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU 2014-08"). Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. In addition, the ASU expands the disclosure requirements for disposals that meet the definition of a discontinued operation, requires entities to disclose information about disposals of individually significant components and defines “discontinued operations” similarly to how it is defined under International Financial Reporting Standards 5, Non-current Assets Held for Sale and Discontinued Operations. The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. Management is still assessing the impact of the adoption to the unaudited condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 02, 2013
Statement of Comprehensive Income [Abstract]
Pension liability, income taxes	$ 0	$ 561	$ 0	$ 645

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Stockholders’ Equity:
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000	5,000	5,000
Preferred stock, shares issued	1	0	0
Preferred stock, shares outstanding	1	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000	200,000
Common stock, shares issued	79,568	78,616	78,608
Treasury stock, shares at cost	472	118	114

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Other Non-current Liabilities

9 Months Ended

Nov. 01, 2014

Other Liabilities Disclosure [Abstract]

Other Non-current Liabilities

Other Non-current Liabilities

Other non-current liabilities consist of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Deferred rent	$	43,685	$	46,831	$	47,153
Deferred tenant allowance	29,515		51,189		54,613
Retirement benefit plan liabilities	5,841		14,339		14,172
Uncertain tax contingency liabilities	2,075		3,702		3,343
Other	14,650		10,527		9,700
Total other non-current liabilities	$	95,766	$	126,588	$	128,981

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Document And Entity Information	9 Months Ended
	Nov. 01, 2014	Dec. 04, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	AEROPOSTALE INC
Entity Central Index Key	0001168213
Entity Well-known Seasoned Issuer	Yes
Current Fiscal Year End Date	--01-31
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		79,122,539
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Nov. 01, 2014

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Revolving Credit Facility

9 Months Ended

Nov. 01, 2014

Line of Credit Facility [Abstract]

Revolving Credit Facility

Revolving Credit Facility

In September 2011, we entered into an amended and restated revolving credit facility with Bank of America, N.A. (the “Credit Facility”). The Credit Facility originally provided for a revolving credit line up to $175.0 million. The Credit Facility is available for working capital and general corporate purposes. The Credit Facility is scheduled to expire on September 22, 2016, and is guaranteed by all of our domestic subsidiaries (the “Guarantors”). No amounts were outstanding during fiscal 2013 or as of November 1, 2014 under the Credit Facility. During the first twenty-six weeks of 2014, we borrowed and repaid $75.5 million. During the third quarter of 2014, we had no borrowings. Management has no reason at this time to believe that the participating institutions will be unable to fulfill their obligations to provide financing in accordance with the terms of the Credit Agreement in the event of our election to draw funds in the foreseeable future.

On February 21, 2014, the Company, certain of its direct and indirect subsidiaries, including GoJane LLC, the Lenders party thereto, and Bank of America, N.A., as agent for the ratable benefit of the Credit Parties (in such capacity, the “Agent”), entered into a Joinder and First Amendment to Third Amended and Restated Loan and Security Agreement and Amendment to Certain Other Loan Documents (the “First Amendment”). The First Amendment amended the Credit Facility, among other things, to increase from $175.0 million to $230.0 million the aggregate amount of loans and other extensions of credit available to the Borrower under the Credit Facility by (i) the addition of a $30.0 million first-in, last-out revolving loan facility based on the appraised value of certain intellectual property of the Company, and (ii) an increase in the Company’s existing revolving credit facility by $25.0 million, from $175.0 million to $200.0 million (which continues to include a $40.0 million sublimit for the issuance of letters of credit). In addition, the accordion feature of the Credit Facility, under which the Company may request an increase in the commitments of the Lenders thereunder from time to time, was reduced from $75.0 million to $50.0 million. GoJane LLC, an indirect wholly-owned subsidiary of the Company, also joined the Credit Facility as a new guarantor.

On May 23, 2014, we entered into $150.0 million senior secured credit facilities with Sycamore Partners. In connection with this agreement, we amended the revolving credit facility with Bank of America N.A. to allow for the incurrence of this additional debt under the Loan Agreement (see Note 3).

Loans under the Credit Facility are secured by substantially all of our assets and are guaranteed by the Guarantors. Upon the occurrence of a Suspension Event (which is defined in the Credit Facility as an event of default or any occurrence, circumstance or state of facts which would become an event of default after notice, or lapse of time, or both) or, in certain circumstances, a Cash Dominion Event (which is defined in the Credit Facility as either any event of default or failure to maintain availability in an amount greater than 12.5% of the lesser of the borrowing base and facility commitment), our ability to borrow funds, make investments, pay dividends and repurchase shares of our common stock may be limited, among other limitations. Direct borrowings under the Credit Facility bear interest at a margin over either LIBOR or at the Prime Rate (as each such term is defined in the Credit Facility).

The Credit Facility also contains covenants that, subject to specified exceptions, restrict our ability to, among other things:

• incur additional debt or encumber assets of the Company;

• merge with or acquire other companies, liquidate or dissolve;

• sell, transfer, lease or dispose of assets; and

• make loans or guarantees.

Events of default under the Credit Facility include, but not limited to, and subject to grace periods and notice provisions in certain circumstances, failure to pay principal amounts when due, breaches of covenants, misrepresentation, default on leases or other indebtedness, excess uninsured casualty loss, excess uninsured judgment or restraint of business, failure to maintain specified availability levels, business failure or application for bankruptcy, legal challenges to loan documents and a change in control. Upon the occurrence of an event of default under the Credit Facility, the Lenders may take action, including but not limited to, cease making loans, termination of the Credit Facility and declaration that all amounts outstanding are immediately due and payable, and taking possession of and selling all assets that have been used as collateral. 

The Company is subject to a restriction requiring the maintenance of minimum availability levels based upon the lesser of 10% of the borrowing base or commitments, as defined in the Credit Facility.  

Availability under the Credit Facility is based on a borrowing base consisting of merchandise inventory, certain intellectual property and receivables. As of November 1, 2014, we had no borrowings and our remaining availability was $173.6 million. During fiscal 2013 and as of February 1, 2014, we had no outstanding balances under the Credit Facility. In June 2012, Bank of America, N.A. issued a stand-by letter of credit. As of November 1, 2014, the outstanding letter of credit was $0.2 million and expires on June 30, 2015. We do not have any other stand-by or commercial letters of credit outstanding as of November 1, 2014 under the Credit Facility.  

As of November 1, 2014, we are not aware of any instances of noncompliance with any financial covenants.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Nov. 01, 2014		Nov. 02, 2013		Nov. 01, 2014		Nov. 02, 2013
Income Statement [Abstract]
Net sales	$ 452,889		$ 514,588		$ 1,244,902		$ 1,420,895
Cost of sales (includes certain buying, occupancy and warehousing expenses)	384,011		426,699		1,042,977		1,150,400
Gross profit	68,878		87,889		201,925		270,495
Selling, general and administrative expenses	121,250		128,923		361,877		375,827
Restructuring charges	1,713		0		39,221		0
Loss from operations	(54,085)		(41,034)		(199,173)		(105,332)
Interest expense	3,035	[1]	314	[1]	5,808	[1]	705	[1]
Loss before income taxes	(57,120)		(41,348)		(204,981)		(106,037)
Income tax benefit	(4,797)		(15,725)		(12,057)		(34,512)
Net loss	$ (52,323)		$ (25,623)		$ (192,924)		$ (71,525)
Basic loss per share	$ (0.66)		$ (0.33)		$ (2.45)		$ (0.91)
Diluted loss per share	$ (0.66)		$ (0.33)		$ (2.45)		$ (0.91)
Weighted average basic shares	79,015		78,488		78,775		78,442
Weighted average diluted shares	79,015		78,488		78,775		78,442

[1] Includes interest expense to related party of $2.7 million during the third quarter of 2014 and $4.8 million for the first thirty-nine weeks of 2014.

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Restructuring Program

9 Months Ended

Nov. 01, 2014

Restructuring Costs [Abstract]

Restructuring Program

Restructuring Program

On April 30, 2014, following an assessment of changing consumer patterns, management and the Board of Directors approved a comprehensive plan to restructure the P.S. from Aéropostale business and to reduce costs. We plan to close approximately 125 mall-based P.S. from Aéropostale stores and streamline and improve the Company's expense structure. We plan to focus on sales channels with higher expectations for growth, including off-mall locations (including outlets), e-commerce and international licensing of P.S. from Aéropostale. We anticipate that substantially all of the planned store closures will be completed on or around the end of fiscal 2014. As of November 1, 2014, 11 mall-based P.S. from Aéropostale stores have been closed. The cost reduction program will also target direct and indirect spending across the organization. This has included the reduction of corporate headcount by eliminating approximately 100 open or occupied positions to align with our current business strategies.

We estimate that we will incur pre-tax restructuring and impairment charges related to these actions totaling approximately $40.0 million to $65.0 million throughout fiscal 2014, of which approximately $25.0 million to $40.0 million are estimated to be cash expenses. Included in the estimate of total pre-tax charges are approximately:

• $5.5 million of consulting and severance expenses resulting from the announced corporate cost reduction initiatives, of which $0.4 million were recorded during the third quarter of 2014 and $5.1 millionduring the firstthirty-nine weeks of 2014.

• $30.5 million of store asset impairments resulting primarily from the expected closures of the P.S. from Aéropostale stores, all of which were recorded during the first quarter of 2014.

• $4.0 million of additional severance resulting from the store closures, of which $1.2 million was recorded during the third quarter of 2014 and $2.5 million for the first thirty-nine weeks of 2014. These costs are expected to be recorded through the remainder of fiscal 2014 until the stores are closed.

• The remainder of the charges relate to estimated lease costs in connection with the store closures, which are expected to be recorded during the remainder of fiscal 2014. We expect to pay significantly all lease costs during the fourth quarter of 2014 and first quarter of 2015.

The charges are recognized in restructuring charges in the statement of operations.

The following is a summary of expenses incurred during the third quarter of 2014 and the first thirty-nine weeks of 2014 associated with the above ongoing actions:

	13 weeks ended		39 weeks ended
	November 1, 2014
	(In thousands)
Severance	$	1,236	$	3,749
Lease costs	146		1,198
Impairment	—		30,497
Other exit costs	331		3,777
Total	$	1,713	$	39,221

The Company accrued liabilities for the above mentioned restructuring charges as of November 1, 2014, which are expected to be paid during fiscal 2014 as follows:

	Impairments			Severance			Lease Costs			Other Exit Costs			Total
	(In thousands)
Liability/Charge at Program Inception	$	30,497		$	1,060		$	1,046		$	1,886		$	34,489
Additions	—			2,689			152			1,891			4,732
Paid or Utilized	(30,497		)	(1,435		)	(315		)	(3,754		)	(36,001		)
Adjustments	—			—			—			—			—
Liability as of November 1, 2014	$	—		$	2,314		$	883		$	23		$	3,220

Of the above liabilities, $2.7 million is recorded in accrued expenses and other current liabilities and the balance is included in non-current liabilities.

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Closing of $150.0 Million Financing Transaction

9 Months Ended

Nov. 01, 2014

Debt Disclosure [Abstract]

Closing of $150.0 Million Financing Transaction

Closing of $150.0 Million Financing Transaction

On May 23, 2014, we entered into (i) a Loan and Security Agreement (the "Loan Agreement") with affiliates of Sycamore Partners, (ii) a Stock Purchase Agreement (the "Stock Purchase Agreement") with Aero Investors LLC, an affiliate of Sycamore Partners for the purchase of 1,000 shares of Series B Convertible Preferred Stock of the Company, $0.01 par value (the "Series B Preferred Stock"), and (iii) an Investor Rights Agreement with Sycamore Partners.

The Loan Agreement made available to us term loans in the principal amount of $150.0 million, consisting of two tranches: a five-year $100.0 million term loan facility (the "Tranche A Loan") and a 10-year $50.0 million term loan facility (the "Tranche B Loan" and, together with the Tranche A Loan, the "Term Loans").

Simultaneously with entering into the Loan Agreement, we amended our existing revolving credit facility with Bank of America, N.A. to allow for the incurrence of the additional debt under the Loan Agreement.

Sycamore Partners is considered a related party due to its ownership interest in us. As of May 23, 2014, Sycamore Partners owned approximately 8% of our outstanding common stock. Stefan Kaluzny, a managing director at Sycamore Partners, had joined our Board of Directors upon the closing of this transaction. In addition to Mr. Kaluzny, Sycamore Partners had received the right to appoint one additional member to our Board, and appointed Julian R. Geiger, who subsequently agreed to become our CEO on August 18, 2014. Additionally a third independent appointee was mutually agreed upon by Sycamore Partners and us.

The accounting guidance related to multiple deliverables in an arrangement provides direction on determining if separate contracts should be evaluated as a single arrangement and if an arrangement involves a single unit of accounting or separate units of accounting. We determined that there were four units of accounting or elements of the arrangement which included Tranche A Loan, Tranche B Loan, Series B convertible preferred stock and the Sourcing Agreement (as hereinafter defined). We allocated the initial value based on the relative fair values of each element in the transaction. We estimated the fair values of Tranche A Loan and Tranche B Loan using the discounted cash flow method. Under this method, the projected interest and principal payments are projected through the life of each loan. These cash flows are then discounted to the present value at an appropriate market-derived discount rate, taking into account market yields at the date of issuance and an assessment of the credit rating applicable to us based on the consideration of various credit metrics along with the terms of each loan (such as duration, coupon rate, etc.) to derive an indication of fair value. These instruments are classified as a Level 3 measurement, as they are not publicly traded and we are therefore unable to obtain quoted market prices. The Series B Preferred Stock represents a convertible security that can be exchanged for shares of Company common stock upon the payment of a cash conversion price of $7.25 per common share equivalent.  Effectively, the Series B Preferred Stock has the characteristic of a warrant as each share represents an option to purchase 3,932.018 shares of common stock at an exercise price of $7.25 per common share, and there is no dividend or liquidation preference associated with the Series B Preferred Stock. Accordingly, the Black-Scholes model was used to determine the fair value of the Convertible Shares with an expected life of 10 years, a risk free interest rate of 2.54%, and expected volatility of 50%. The Sourcing Agreement was determined to be at fair value and therefore no proceeds were allocated to the agreement.

On May 23, 2014, the Term Loans were disbursed in full and we received net proceeds of $137.6 million from an affiliate of Sycamore Partners, after deducting the first year interest payment and certain issuance fees.

Loan Agreement

The Tranche A Loan bears interest at an interest rate equal to 10% per annum and, at our election, up to 50% of the interest can be payable-in-kind during the first three years and up to 20% of the interest can be payable-in-kind during the final two years. The first year of interest under the Tranche A Facility in the amount of $10.0 million was prepaid in cash in full on May 23, 2014, and no other interest payments are required to be paid during the first year of the Tranche A Loan. The Tranche A Loan has no annual scheduled repayment requirements. The Tranche A Loan is scheduled to mature on May 23, 2019. The Tranche B Loan will not accrue any interest. The Tranche B Loan has no stated interest rate and will be repaid in equal annual installments of 10% per annum. The Tranche B Loan is scheduled to mature on the earlier of (a) tenth anniversary of the end of the Start-Up Period (as such term is defined in the Sourcing Agreement) and (b) the expiration or termination of the Sourcing Agreement described below.

The Term Loans are guaranteed by certain of our domestic subsidiaries and secured by a second priority security interest in all assets of the Company and certain of our subsidiaries that were already pledged for the benefit of Bank of America, N.A., as agent, under its existing revolving credit facility, and a first priority security interest in our, and certain of our subsidiaries', remaining assets.

The Loan Agreement contains representations, covenants and events of default that are substantially consistent with our existing revolving credit facility with Bank of America, N.A. The Loan Agreement also contains a $70.0 million minimum liquidity covenant. The Company was in compliance with the minimum liquidity covenant and other covenants under the Loan Agreements at November 1, 2014.

The proceeds of the Term Loans are to be used for working capital and other general corporate purposes. Prepayment of the Tranche A Loan will require payment of a premium of 10% of the principal amount prepaid on or before the one year anniversary of the closing, and 5% of the principal amount prepaid on or before the second anniversary of the closing. There is no prepayment penalty after the second anniversary of the closing. The Tranche B Loan may be prepaid at any time without premium or penalty.

We recorded liabilities for the Term Loans using imputed interest based on our best estimate of its incremental borrowing rates. The effective interest rate used for Tranche A Loan was 7.19%, resulting in an initial present value of $101.7 million and a resulting debt premium of $1.7 million. The premium is being amortized to interest expense over the expected term of the debt using the effective interest method. The effective interest rate for Tranche B Loan used was 7.86%, resulting in an initial present value of $30.0 million and a debt discount of $20.0 million, which is also being amortized to interest expense over the expected term of the debt. Additionally, we recorded deferred financing fees of $5.9 million related to the Term Loans which are being amortized to interest expense over the expected terms of the debt.

We had fair values of $136.0 million in borrowings outstanding under the Loan Agreement, with face value of $150.0 million, as of November 1, 2014. Fair value outstanding for Tranche A Loan was $105.0 million, with a face value of $100.0 million. Fair value outstanding for Tranche B Loan was $31.0 million, with a face value of $50.0 million. Fair values approximate carrying values. Total interest and fees expense associated with this transaction was $2.7 million for the third quarter of 2014 and $4.8 million for the first thirty-nine weeks of 2014.

Series B Convertible Preferred Stock

Concurrent with, and as a condition to, entering into the Loan Agreement, we issued 1,000 shares of the Series B Preferred Stock to Investor at an aggregate offer price of $100,000. Each share of Series B Preferred Stock is convertible at any time at the option of the holder on or prior to May 23, 2024 into shares of common stock at an initial conversion rate of 3,932.018 for each share of Series B Preferred Stock. The common stock underlying the Series B Preferred Stock represents 5% of our issued and outstanding common stock as of May 23, 2014. The Series B Preferred Stock is convertible into shares of the common stock at an initial cash conversion price of $7.25 per share of the underlying common stock. The number of shares of Series B Preferred Stock or common stock to be issued upon exercise and the respective exercise prices are subject to adjustment for changes in the Series B Preferred Stock or common stock, such as stock dividends, stock splits, and similar changes. In the event of a change of control transaction, the Series B Preferred Stock will automatically convert into common stock subject to payment by the holder of such Series B Preferred of the aggregate cash conversion price then in effect, if such conversion price is lower than the per share consideration to be received in the change of control transaction. If the per share consideration to be received in the change of control transaction is less than or equal to the per share cash conversion price then in effect, the Series B Preferred will be automatically converted into a right to receive an amount per share equal to the par value of such share of Series B Preferred Stock.

We analyzed the embedded conversion option for derivative accounting consideration under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 815-15, “Derivatives and Hedging” and determined that the conversion option should be classified as equity. We also analyzed the conversion option for beneficial conversion features consideration under ASC Subtopic 470-20 “Convertible Securities with Beneficial Conversion Features” and noted none. The Series B Preferred Stock was recorded in equity at a fair value of $5.9 million upon issuance, and was not recorded as a liability on the consolidated balance sheet.

Non-Exclusive Sourcing Agreement

As a condition to funding the Tranche B Loan, we and one of our subsidiaries also entered into a non-exclusive Sourcing Agreement (the "Sourcing Agreement") with TSAM (Delaware) LLC (d/b/a MGF Sourcing US LLC), an affiliate of Sycamore Partners ("MGF"). The price of merchandise sold to us by MGF pursuant to the Sourcing Agreement is required to be competitive to market. We expect to commence sourcing goods with MGF pursuant to the Sourcing Agreement during the fourth quarter of 2014.

We guarantee the obligations of our subsidiary under the Sourcing Agreement. The Sourcing Agreement requires us to purchase a minimum volume of product for a period of 10 years commencing on our first fiscal quarter of 2016 (such period, the "Minimum Volume Commitment Period"), of between $240.0 million and $280.0 million per annum depending on the year (the "Minimum Volume Commitment"). If we fail to purchase the applicable Minimum Volume Commitment in any given year, we will pay a shortfall commission to MGF, based on a scaled percentage of the applicable Minimum Volume Commitment shortfall during the applicable period.

Under the Sourcing Agreement, MGF is required to pay to us an annual rebate equal to a fixed amount multiplied by the percentage of annual purchases made by us (including purchases deemed to be made by virtue of payment of the shortfall commission) relative to the Minimum Volume Commitment to be applied towards the payment of the required amortization on the Tranche B Loan. The Sourcing Agreement also provides for certain carryover credits if we purchase a volume of product above the Minimum Volume Commitment during the applicable Minimum Volume Commitment Period.

We may terminate the Sourcing Agreement upon nine (9) months' notice at any time after the first three years of the Minimum Volume Commitment Period have elapsed, subject to payment of a termination fee scaled to the term remaining under the Sourcing Agreement.

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Segment Information

9 Months Ended

Nov. 01, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about a company’s operating segments. In the fourth quarter of 2013, management concluded that we have two reportable segments: a) retail stores and e-commerce; and b) international licensing. As a result, prior year segment information has been recasted to conform to the current year presentation. These reportable segments were identified based on how our business is managed and evaluated. The reportable segments represent the Company’s activities for which separate financial information is available and which is utilized on a regular basis by the Company’s chief operating decision maker (“CODM”) to evaluate performance and allocate resources. The retail stores and e-commerce segment includes Aéropostale U.S., Aéropostale Canada, P.S. from Aéropostale and GoJane. In identifying our reportable segments, the Company considers economic characteristics, as well as products, customers, sales growth potential and long-term profitability. The accounting policies of the Company’s reportable segments are consistent with those described in Note 1 of our Annual Report on Form 10-K for the fiscal year ended February 1, 2014. All intercompany transactions are eliminated in consolidation. We do not rely on any major customers as a source of revenue.  

The following tables provide summary financial data for each of our segments (in thousands):

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
Net sales:
Retail stores and e-commerce	$	442,906	$	508,813	$	1,219,668	$	1,407,700
International licensing	9,983		5,775		25,234		13,195
Total net sales	$	452,889	$	514,588	$	1,244,902	$	1,420,895

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Loss from operations:
Retail stores and e-commerce 1	$	(43,839	)	$	(41,369	)	$	(140,191	)	$	(101,118	)
International licensing	9,253			5,388			23,048			12,070
Other 2	(19,499		)	(5,053		)	(82,030		)	(16,284		)
Total loss from operations	$	(54,085	)	$	(41,034	)	$	(199,173	)	$	(105,332	)

¹ Such amounts include all corporate overhead and shared service function costs. We have not allocated a portion of these costs to international licensing in this presentation to be consistent with how the CODM reviews the results.

² Other items for the third quarter and first thirty-nine weeks of 2014, which are all related to the retail stores and e-commerce segment, included restructuring charges (See Note 3), store asset impairment charges (See Note 4) and other income (charges) that are not included in the segment income (loss) from operations reviewed by the CODM. Other items for the third quarter of 2013 and first thirty-nine weeks of 2013 included store asset impairment and other charges.

Depreciation expense and capital expenditures have not been separately disclosed as the amounts primarily relate to the retail stores and e-commerce segment. Such amounts are not material for the international licensing segment.

	November 1, 2014		February 1, 2014		November 2, 2013
Total assets:
Retail stores and e-commerce	$	567,032	$	637,927	$	734,083
International licensing	11,292		9,714		8,230
Total assets	$	578,324	$	647,641	$	742,313

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Retirement Benefit Plans

9 Months Ended

Nov. 01, 2014

Compensation and Retirement Disclosure [Abstract]

Retirement Benefit Plans

Retirement Benefit Plans

Retirement benefit plan liabilities consisted of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Supplemental Executive Retirement Plan (“SERP”)	$	7,511	$	10,551	$	10,434
Other retirement plan liabilities	4,140		4,050		3,738
Total	$	11,651	$	14,601	$	14,172
Less amount classified in accrued expenses related to SERP	5,810		—		—
Less amount classified in accrued expenses related to other retirement plan liabilities	—		262		—
Long-term retirement benefit plan liabilities	$	5,841	$	14,339	$	14,172

401(k) Plan

We maintain a qualified, defined contribution retirement plan with a 401(k) salary deferral feature that covers substantially all of our employees who meet certain requirements.  Under the terms of the plan, employees may contribute, subject to statutory limitations, up to 100% of gross earnings and historically, including fiscal 2013, we have provided a matching contribution of 50% of the first 5% of gross earnings contributed by the participants.  We also have the option to make additional contributions or to suspend the employer contribution at any time. The employer's matching contributions vest over a five-year service period with 20% vesting after two years and 50% vesting after year three.  Vesting increases thereafter at a rate of 25% per year so that participants will be fully vested after five years of service. We also have separate defined contribution plans for eligible employees in both Canada and Puerto Rico who meet certain requirements. We have suspended the Company's matching contribution under the plan in the U.S. and Canada for fiscal 2014. Contribution expense for all plans was not material to the unaudited condensed consolidated financial statements for any period presented.

Supplemental Executive Retirement Plan

We maintain a Supplemental Executive Retirement Plan, or SERP, which is a non-qualified defined benefit plan for certain executives.  The plan is non-contributory and not funded and provides benefits based on years of service and compensation during employment.  Participants are fully vested upon entrance in the plan. Pension expense is determined using the projected unit credit cost method to estimate the total benefits ultimately payable to officers and this cost is allocated to service periods.  The actuarial assumptions used to calculate pension costs are reviewed annually.

The components of net periodic pension benefit cost are as follows:

	13 weeks ended				39 weeks ended
	November 1, 2014		November 2, 2013		November 1, 2014		November 2, 2013
	(In thousands)
Service cost	$	55	$	131	$	314	$	397
Interest cost	76		108		279		328
Amortization of prior experience cost	18		18		55		56
Amortization of net loss	6		69		68		241
Net periodic pension benefit cost	$	155	$	326	$	716	$	1,022

We expect to make a payment to Thomas P. Johnson, our former Chief Executive Officer, from our Supplemental Executive Retirement Plan (“SERP”) of approximately $5.8 million, subject to interest rate fluctuations, during the first quarter of 2015. Accordingly, the SERP liability related to Mr. Johnson has been classified as a current liability in our unaudited condensed consolidated balance sheet as of November 1, 2014. Such amount will be paid from our cash flows from operations. At the date of payment to Mr. Johnson, we will record a benefit estimated to be approximately $0.9 million in selling, general and administrative expenses, with a corresponding amount recorded to relieve accumulated other comprehensive loss included in our stockholders' equity. This accounting treatment is in accordance with settlement accounting procedures under the provisions of ASC Topic 715, "Compensation - Retirement Benefits".

During September 2013, we made a payment of approximately $2.2 million to our former President from our SERP. Such amount was paid from our cash flows from operations. In connection with this payment, during the third quarter of 2013, we recorded a charge of $0.6 million of the net actuarial loss (the "settlement loss") as a charge in SG&A, with a corresponding amount recorded to relieve accumulated other comprehensive loss included in our stockholders' equity ($0.4 million, net of tax).

Other Retirement Plan Liabilities

We have a long-term incentive deferred compensation plan established for the purpose of providing long-term incentives to a select group of management. The plan is a non-qualified, non-contributory defined contribution plan and is not funded. Participants in this plan include all employees designated by us as Vice President, or other higher-ranking positions that are not participants in the SERP. We record annual monetary credits to each participant's account based on compensation levels and years as a participant in the plan. Annual interest credits are applied to the balance of each participant's account based upon established benchmarks. Each annual credit is subject to a three-year cliff-vesting schedule, and participants' accounts will be fully vested upon retirement after completing five years of service and attaining age 55. The liability related to this plan was $4.0 million as of November 1, 2014, $3.9 million as of February 1, 2014 and $3.6 million as of November 2, 2013. Compensation expense related to this plan was not material to our unaudited condensed consolidated financial statements for any period presented.

We maintain a postretirement benefit plan for certain executives that provides retiree medical and dental benefits. The plan is an other post-employment benefit plan, or OPEB, and is not funded. Pension expense and the liability related to this plan were not material to our unaudited condensed consolidated financial statements for any period presented.

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Loss Per Share

9 Months Ended

Nov. 01, 2014

Earnings Per Share [Abstract]

Loss Per Share

Loss Per Share

The following table sets forth the computations of basic and diluted loss per share:

	13 weeks ended						39 weeks ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
	(In thousands, except per share data)
Net loss	$	(52,323	)	$	(25,623	)	$	(192,924	)	$	(71,525	)
Weighted average basic shares	79,015			78,488			78,775			78,442
Impact of dilutive securities	—			—			—			—
Weighted average diluted shares	79,015			78,488			78,775			78,442
Basic loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)
Diluted loss per share	$	(0.66	)	$	(0.33	)	$	(2.45	)	$	(0.91	)

All options to purchase shares, in addition to restricted, performance shares and convertible preferred shares, were excluded from the computation of diluted loss per share because the effect would be anti-dilutive during fiscal 2014 and fiscal 2013.

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Fair Value Measurements

9 Months Ended

Nov. 01, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We follow the guidance in ASC Topic 820, “Fair Value Measurement” (“ASC 820”) as it relates to financial and nonfinancial assets and liabilities. ASC 820 prioritizes inputs used in measuring fair value into a hierarchy of three levels:

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available.

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:

	Level 1						Level 2						Level 3
	November 1, 2014		February 1, 2014		November 2, 2013		November 1, 2014		February 1, 2014		November 2, 2013		November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Assets:
Cash equivalents 1	$	80,005	$	82,378	$	36,265	$	—	$	—	$	—	$	—	$	—	$	—
Total	$	80,005	$	82,378	$	36,265	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities:
GoJane performance plan liability 2	$	—	$	—	$	—	$	—	$	—	$	—	$	5,915	$	7,416	$	7,350
Exit costs obligation 3	—		—		—		—		—		—		2,889		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	8,804	$	7,416	$	7,350

¹ Cash and cash equivalents include money market investments valued as Level 1 inputs in the fair value hierarchy. The fair value of cash and cash equivalents approximates their carrying value due to their short-term maturities.

² Under the terms of the fiscal 2012 GoJane acquisition agreement, the purchase price also includes contingent cash payments of up to an aggregate of $8.0 million if certain financial metrics are achieved by the GoJane business during the five year period beginning on the acquisition date (the "GJ Performance Plan"). These performance payments are not contingent upon continuous employment by the two individual stockholders. The GJ Performance Plan liability is measured at fair value using Level 3 inputs as defined in the fair value hierarchy. The fair value of the contingent payments as of the acquisition date was estimated to be $7.0 million. This was based on a weighted average expected achievement probability and a discount rate over the expected payment stream. Each quarter, we remeasure the GJ Performance Plan liability at fair value.

³ In accordance with the lease assignment for the 34th Street store, we placed $2.4 million in escrow for payment of real estate taxes. We recorded an exit cost obligation related to the real estate taxes at fair value of $2.0 million on the cease-use date. Additionally, the above exit costs obligation includes $1.0 million of lease costs related to four P.S. from Aéropostale stores with previously executed leases that will not open in connection with our restructuring program. These exit cost liabilities are measured at fair value using Level 3 inputs as defined in the fair value hierarchy. This was based on a discount rate over the expected payment streams. Each quarter we remeasure these liabilities at fair value.

The following table provides a reconciliation of the beginning and ending balances of the GJ Performance Plan measured at fair value using significant unobservable inputs (Level 3):

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Balance at beginning of period	$	7,416		$	7,019
Accretion of interest expense	99			331
GoJane consideration payment	(1,600		)	—
Balance at end of period	$	5,915		$	7,350

The $5.9 million liability as of November 1, 2014 was included in non-current liabilities. Of the $7.4 million liability as of November 2, 2013, $1.6 million was included in accrued expenses and other current liabilities and the balance was included in non-current liabilities.

The following table provides a reconciliation of the beginning and ending balances of the Exit Cost Obligations measured at fair value using significant unobservable inputs (Level 3):

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Balance at beginning of period	$	—		$	—
Fair value of exit costs obligations at cease-use date	3,009			—
Accretion of rent expense	245			—
Payments	(365		)	—
Balance at end of period	$	2,889		$	—

Of the $2.9 million liability as of November 1, 2014, $0.8 million was included in accrued expenses and other current liabilities and the balance was included in non-current liabilities.

Non-Financial Assets

Our non-financial assets, which include fixtures, equipment and improvements and intangible assets, are not required to be measured at fair value on a recurring basis.  However, if certain triggering events occur, or if an impairment test is required and we are required to evaluate the non-financial asset for impairment, a resulting asset impairment would require that the non-financial asset be recorded at a new cost based on its measured fair value.  

We recorded asset impairment charges, all of which was included in the cost of sales, of approximately $12.5 million during the third quarter of 2014 primarily for 59 stores. We recorded asset impairment charges of approximately $64.6 million during the first thirty-nine weeks of 2014 for primarily 277 stores. Of these charges, $34.1 million was included in cost of sales. The remaining $30.5 million was included in restructuring charges, as it related to the P.S. from Aéropostale stores to be exited. We recorded store asset impairment charges of approximately $5.1 million during the third quarter of 2013 for primarily 25 stores and $13.6 million during the first thirty-nine weeks of 2013 for primarily 72 stores. These charges were included in cost of sales.  These amounts included the write-down of long-lived assets at stores that were assessed for impairment because of (a) changes in circumstances that indicated the carrying value of assets may not be recoverable, or (b) management’s intention to relocate or close stores.  Impairment charges were primarily related to revenues and/or gross margins not meeting targeted levels at the respective stores as a result of macroeconomic conditions, location related conditions and other factors that are negatively impacting the sales and cash flows of these locations.

Long-lived assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 3 inputs as defined in the fair value hierarchy.  The fair value of long-lived assets is determined by estimating the amount and timing of net future discounted cash flows.  We estimate future cash flows based on our experience, current trends and local market conditions. Based upon future results of operations at the store level, additional impairment charges may be recorded in future periods if loss trends continue and/or the current cash flow projections are not achieved.

The table below sets forth by level within the fair value hierarchy the fair value of long-lived assets for which impairment was recognized for the first thirty-nine weeks of 2014 and the first thirty-nine weeks of 2013:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Total Losses
	(In thousands)
November 1, 2014:
Long-lived assets held and used	$	—	$	—	$	6,488	$	6,488	$	64,611
November 2, 2013:
Long-lived assets held and used	$	—	$	—	$	5,431	$	5,431	$	13,624

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Stockholders' Equity

9 Months Ended

Nov. 01, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stockholders Rights Plan

On November 26, 2013, we entered into a Rights Agreement with American Stock Transfer & Trust Company, LLC (the “Rights Agreement”), pursuant to which the Company, among other things, issued one right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, of the Company (the “Rights Plan”). By its terms, the Rights Plan provided that, among other things, the Rights would expire upon the close of business on the earliest to occur of: (i) November 26, 2014, (ii) the date on which the rights are redeemed or exchanged by the Company in accordance with the Rights Agreement and (iii) the date of the Company’s 2014 annual meeting of stockholders if requisite stockholder approval of the Rights Agreement is not obtained at such meeting. The Board determined not to seek stockholder approval of the Rights Plan at the 2014 Annual Meeting which occurred on June 30, 2014. Consequently, pursuant to the terms of the Rights Plan, and without any further action, as of the date of the Annual Meeting, the right to exercise the Rights terminated, each Right is null and void and the Rights Plan expired.

Stock Repurchase Program

We have the ability to repurchase our common stock under a stock repurchase program, which was announced on December 9, 2003. The repurchase program may be modified or terminated by the Board of Directors at any time and there is no expiration date for the program. The extent and timing of repurchases will depend upon general business and market conditions, stock prices, opening and closing of the stock trading window, and liquidity and capital resource requirements going forward.

We did not repurchase shares of our common stock during the first thirty-nine weeks of 2014 or 2013 under the stock repurchase program.  We have repurchased 60.1 million shares of our common stock for $1.0 billion under the program to date.  As of November 1, 2014, we have approximately $104.4 million of repurchase authorization remaining under our $1.15 billion share repurchase program.

In addition to the above program, we withheld 354,000 shares for minimum statutory withholding taxes of $1.5 million related to the vesting of stock awards during the first thirty-nine weeks of 2014.

Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

	November 1, 2014		February 1, 2014			November 2, 2013
	(In thousands)
Pension liability, net of tax	$	1,751	$	(2,007	)	$	(1,573	)
Cumulative foreign currency translation adjustment 1	889		824			1,593
Total accumulated other comprehensive loss	$	2,640	$	(1,183	)	$	20

¹ Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in our subsidiary in Canada.

The changes in components in accumulated other comprehensive (loss) income are as follows:

	39 weeks ended
	November 1, 2014
	Pension Liability			Foreign Currency Translation		Total
	(In thousands)
Beginning balance at February 2, 2014	$	(2,007	)	$	824	$	(1,183	)
Other comprehensive income before reclassifications	—			65		65
Reclassified from accumulated other comprehensive income	3,758			—		3,758
Tax effect on pension liability	—			—		—
Net current-period other comprehensive income	$	3,758		$	65	$	3,823
Ending balance at November 1, 2014	$	1,751		$	889	$	2,640

	39 weeks ended
	November 2, 2013
	Pension Liability			Foreign Currency Translation			Total
	(In thousands)
Beginning balance at February 3, 2013	$	(2,541	)	$	2,731		$	190
Other comprehensive loss before reclassifications	—			(1,138		)	(1,138		)
Reclassified from accumulated other comprehensive income	1,613			—			1,613
Tax effect on pension liability	(645		)	—			(645		)
Net current-period other comprehensive income (loss)	$	968		$	(1,138	)	$	(170	)
Ending balance at November 2, 2013	$	(1,573	)	$	1,593		$	20

The details related to the reclassifications out of accumulated comprehensive loss are as follows:

	13 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Amortization of defined benefit plan items:
Net gain	$	3,633	1	$	739		1
Amortization of loss	$	6	1	68			1
Amortization of prior service cost	18		1	18			1
Settlement loss	—		1	577			1
Total before tax	$	3,657		$	1,402
Tax expense	—			(561		)
Net of tax	$	3,657		$	841

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Amortization of defined benefit plan items:
Net gain	$	3,633	1	$	739		1
Amortization of loss	69		1	241			1
Amortization of prior service cost	56		1	56			1
Settlement loss	—		1	577			1
Total before tax	$	3,758		$	1,613
Tax expense	—			(645		)
Net of tax	$	3,758		$	968

¹ These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost (see Note 11).

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Nov. 01, 2014

Accrued Liabilities and Other Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expensesand Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Accrued gift cards	$	17,030	$	27,783	$	21,076
Accrued compensation and retirement benefit plan liabilities	22,014		16,939		10,928
Current portion of tenant allowances	14,057		—		—
Other	46,218		57,394		54,640
Total accrued expenses and other current liabilities	$	99,319	$	102,116	$	86,644

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Description of Business (Details)	Nov. 01, 2014 state Stores
Aeropostale Stores
Nature of Operations [Line Items]
Number of stores	911
Number of states in which entity operates	50
Aeropostale Stores | United States and Puerto Rico
Nature of Operations [Line Items]
Number of stores	842
Aeropostale Stores | CANADA
Nature of Operations [Line Items]
Number of stores	69
Aeropostale Stores | Middle East, Asia, Europe and Latin America
Nature of Operations [Line Items]
Number of stores	220
P.S. from Aeropostale Stores
Nature of Operations [Line Items]
Number of stores	141
P.S. from Aeropostale Stores | United States and Puerto Rico
Nature of Operations [Line Items]
Number of states in which entity operates	32
Aeropostale and PS Combination Store | Middle East, Asia, Europe and Latin America
Nature of Operations [Line Items]
Number of stores	1

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Retirement Benefit Plans Benefit plan liabilities (Details) (USD $) In Thousands, unless otherwise specified	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Defined Benefit Plan Disclosure [Line Items]
Retirement benefit plan liabilities	$ 11,651	$ 14,601	$ 14,172
Long-term retirement benefit plan liabilities	5,841	14,339	14,172
Supplemental Employee Retirement Plan
Defined Benefit Plan Disclosure [Line Items]
Retirement benefit plan liabilities	7,511	10,551	10,434
Amount classified in accrued expenses	5,810	0	0
Other Retirement Plans
Defined Benefit Plan Disclosure [Line Items]
Retirement benefit plan liabilities	4,140	4,050	3,738
Amount classified in accrued expenses	$ 0	$ 262	$ 0

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Commitments and Contingent Liabilities

9 Months Ended

Nov. 01, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

 Commitments and Contingent Liabilities

Legal Proceedings - In October 2011, Aéropostale, Inc. and senior executive officers Thomas P. Johnson and Marc D. Miller were named as defendants in an action amended in February 2012, City of Providence v. Aéropostale, Inc., et al., No. 11-7132, a class action lawsuit alleging violations of the federal securities laws.  The lawsuit was filed in New York federal court on behalf of purchasers of Aéropostale securities between March 11, 2011 and August 18, 2011.  The lawsuit alleges that the defendants made materially false and misleading statements regarding the Company's business and prospects and failed to disclose that Aéropostale was experiencing declining demand for its women's fashion division and increasing inventory.  A motion to dismiss was denied on March 25, 2013.  Aéropostale and the plaintiffs have entered into a settlement agreement resolving the claims made in this action, without any admission of liability, for the amount of $15 million, all of which was funded with insurance proceeds. The settlement received final court approval on May 9, 2014.

Also in October 2011, current and former Aéropostale directors and/or senior executive officers Julian R. Geiger, Ronald R. Beegle, Robert B. Chavez, Michael J. Cunningham, Evelyn Dilsaver, John Haugh, Karin Hirtler-Garvey, John D. Howard, Thomas P. Johnson, and David B. Vermylen were named as defendants in Bell v. Geiger, et al., No. 652931/2011, a shareholder derivative lawsuit filed in New York state court seeking relief derivatively on behalf of Aéropostale.  The action alleged that the defendants breached their fiduciary duties to Aéropostale between February 3, 2011 and August 3, 2011 by failing to establish and maintain internal controls that would have prevented the Company from disseminating allegedly false and misleading and inaccurate statements and other information to shareholders, and to manage and oversee the Company.  As a result, plaintiff alleged that the defendants exposed the Company to potential liability in the federal securities class action lawsuit described above.

In February 2012, current and former Aéropostale directors and/or senior executive officers Mindy Meads, Bodil Arlander, Julian Geiger, Karin Hirtler-Garvey, Ronald Beegle, Robert Chavez, Michael Cunningham, Evelyn Dilsaver, John Haugh, John Howard, Thomas Johnson, Arthur Rubinfeld, and David Vermylen were named as defendants in The Booth Family Trust v. Meads, et al., No. 650594/2012, a shareholder derivative lawsuit filed in New York state court, seeking relief derivatively on behalf of Aéropostale.  As in Bell, this action alleges that the defendants breached their fiduciary duties to Aéropostale by failing to establish and maintain internal controls that would have prevented the Company from disseminating allegedly false and misleading and inaccurate statements and other information to shareholders, and to manage and oversee the Company.  As a result, and as in Bell, plaintiff alleges that the defendants have exposed the Company to losses and damages, including civil liability from the securities class action suit described above.

On April 24, 2012, the New York Supreme Court, New York County, issued an Order consolidating and staying the Bell and Booth actions pending a ruling on the motion to dismiss filed in the City of Providence federal securities class action. Following denial of the motion to dismiss in the federal securities class action, plaintiff filed an amended complaint in the consolidated Bell/Booth action. Defendants have moved to dismiss that complaint. A hearing on the motion to dismiss the Bell/Booth action occurred on January 7, 2014 and at that hearing the court granted the Defendants motion to dismiss the complaint. The plaintiffs have not appealed and the court's decision is final.

During February 2014, we settled litigations related to California wage and hour matters. During the first thirty-nine weeks of 2014, we made settlement payments of $3.6 million. In addition, we have remaining liabilities previously recorded of $0.8 million as of November 1, 2014 related to these settlements.

We are also party to various litigation matters and proceedings in the ordinary course of business.  In the opinion of our management, dispositions of these matters are not expected to have a material adverse effect on our financial position, results of operations or cash flows.

Contingencies - On May 23, 2014, we entered into $150.0 million senior secured credit facilities with affiliates of Sycamore Partners. In connection with this agreement, we entered into an exclusive sourcing agreement with an affiliate of Sycamore Partners that requires us to purchase a minimum volume of product for 10 years. This purchase commitment will commence during the first quarter of fiscal 2016, and is between $240.0 million and $280.0 million per annum depending on the year (see Note 3).

In June 2012, Bank of America, N.A. issued a stand-by letter of credit. As of November 1, 2014, the outstanding letter of credit was $0.2 million and expires on June 30, 2015. We do not have any other stand-by or commercial letters of credit as of November 1, 2014.

We have various product license agreements that obligate us to pay the licensee at least the guaranteed minimum royalty amount based on sales of their products.

We have not issued any third party guarantees or commercial commitments as of November 1, 2014.

Executive Severance Plan - On November 12, 2013, we adopted a Change of Control Severance Plan ("the Plan"), which entitles certain executive level employees to receive certain payments upon a termination of employment after a change of control (as defined in the Plan) of the Company. The adoption of the Plan did not have any impact on the unaudited condensed consolidated financial statements for any periods presented.

Employment Agreement - On August 18, 2014, we entered into an Employment Agreement with Mr. Geiger pursuant to which he will serve as our Chief Executive Officer. The Employment Agreement, which has a three-year term, provides for an annual salary of $1.5 million in addition to a performance based bonus (see Note 12).

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Fair Value Measurements (Tables)

9 Months Ended

Nov. 01, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:

	Level 1						Level 2						Level 3
	November 1, 2014		February 1, 2014		November 2, 2013		November 1, 2014		February 1, 2014		November 2, 2013		November 1, 2014		February 1, 2014		November 2, 2013
	(In thousands)
Assets:
Cash equivalents 1	$	80,005	$	82,378	$	36,265	$	—	$	—	$	—	$	—	$	—	$	—
Total	$	80,005	$	82,378	$	36,265	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities:
GoJane performance plan liability 2	$	—	$	—	$	—	$	—	$	—	$	—	$	5,915	$	7,416	$	7,350
Exit costs obligation 3	—		—		—		—		—		—		2,889		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	8,804	$	7,416	$	7,350

¹ Cash and cash equivalents include money market investments valued as Level 1 inputs in the fair value hierarchy. The fair value of cash and cash equivalents approximates their carrying value due to their short-term maturities.

² Under the terms of the fiscal 2012 GoJane acquisition agreement, the purchase price also includes contingent cash payments of up to an aggregate of $8.0 million if certain financial metrics are achieved by the GoJane business during the five year period beginning on the acquisition date (the "GJ Performance Plan"). These performance payments are not contingent upon continuous employment by the two individual stockholders. The GJ Performance Plan liability is measured at fair value using Level 3 inputs as defined in the fair value hierarchy. The fair value of the contingent payments as of the acquisition date was estimated to be $7.0 million. This was based on a weighted average expected achievement probability and a discount rate over the expected payment stream. Each quarter, we remeasure the GJ Performance Plan liability at fair value.

³ In accordance with the lease assignment for the 34th Street store, we placed $2.4 million in escrow for payment of real estate taxes. We recorded an exit cost obligation related to the real estate taxes at fair value of $2.0 million on the cease-use date. Additionally, the above exit costs obligation includes $1.0 million of lease costs related to four P.S. from Aéropostale stores with previously executed leases that will not open in connection with our restructuring program. These exit cost liabilities are measured at fair value using Level 3 inputs as defined in the fair value hierarchy. This was based on a discount rate over the expected payment streams. Each quarter we remeasure these liabilities at fair value.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a reconciliation of the beginning and ending balances of the Exit Cost Obligations measured at fair value using significant unobservable inputs (Level 3):

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Balance at beginning of period	$	—		$	—
Fair value of exit costs obligations at cease-use date	3,009			—
Accretion of rent expense	245			—
Payments	(365		)	—
Balance at end of period	$	2,889		$	—

The following table provides a reconciliation of the beginning and ending balances of the GJ Performance Plan measured at fair value using significant unobservable inputs (Level 3):

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Balance at beginning of period	$	7,416		$	7,019
Accretion of interest expense	99			331
GoJane consideration payment	(1,600		)	—
Balance at end of period	$	5,915		$	7,350

Fair Value of Long-Lived Assets Impaired

The table below sets forth by level within the fair value hierarchy the fair value of long-lived assets for which impairment was recognized for the first thirty-nine weeks of 2014 and the first thirty-nine weeks of 2013:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Total Losses
	(In thousands)
November 1, 2014:
Long-lived assets held and used	$	—	$	—	$	6,488	$	6,488	$	64,611
November 2, 2013:
Long-lived assets held and used	$	—	$	—	$	5,431	$	5,431	$	13,624

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Other Non-current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Other Liabilities Disclosure [Abstract]
Deferred rent	$ 43,685	$ 46,831	$ 47,153
Deferred tenant allowance	29,515	51,189	54,613
Retirement benefit plan liabilities	5,841	14,339	14,172
Uncertain tax contingency liabilities	2,075	3,702	3,343
Other	14,650	10,527	9,700
Total other non-current liabilities	$ 95,766	$ 126,588	$ 128,981

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Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Cash equivalents	$ 80,005	$ 82,378	$ 36,265
Total	80,005	82,378	36,265
Liabilities:
Go Jane performance plan liability	0	0	0
Exit costs obligation	0	0	0
Total	0	0	0
Significant Other Observable Inputs (Level 2)
Assets:
Cash equivalents	0	0	0
Total	0	0	0
Liabilities:
Go Jane performance plan liability	0	0	0
Exit costs obligation	0	0	0
Total	0	0	0
Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	0	0	0
Total	0	0	0
Liabilities:
Go Jane performance plan liability	5,915	7,416	7,350
Exit costs obligation	2,889	0	0
Total	$ 8,804	$ 7,416	$ 7,350

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Condensed Consolidated Statements of Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Nov. 01, 2014	Nov. 01, 2014
Income Statement [Abstract]
Related party interest expense	$ 2.7	$ 4.8

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Basis of Presentation

9 Months Ended

Nov. 01, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America. However, in the opinion of our management, all adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist primarily of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may materially differ from these estimates.

Our business is highly seasonal, and historically, we have realized a significant portion of our sales and cash flows in the second half of the year, attributable to the impact of the back-to-school selling season in the third quarter and the holiday selling season in the fourth quarter.  As a result, our working capital requirements fluctuate during the year, increasing in mid-summer in anticipation of the third and fourth quarters. Our business is also subject, at certain times, to calendar shifts which may occur during key selling times such as school holidays, Easter and regional fluctuations in the calendar during the back-to-school selling season. Therefore, our interim period unaudited condensed consolidated financial statements may not be indicative of our full-year results of operations, financial condition or cash flows.  These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for our fiscal year ended February 1, 2014 (“Fiscal 2013 10-K”).

References to “2014” or “fiscal 2014” mean the 52-week period ending January 31, 2015 and references to “2013” or “fiscal 2013” mean the 52-week period ended February 1, 2014.  References to “the third quarter of 2014” mean the thirteen-week period ended November 1, 2014 and references to “the third quarter of 2013” mean the thirteen-week period ended November 2, 2013.

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended	12 Months Ended
	Nov. 01, 2014	Nov. 01, 2014	Feb. 01, 2014	Nov. 02, 2013
Income Tax Disclosure [Abstract]
Cumulative tax effect of change in tax method	$ 7.1
Income tax benefit		2.7
Recorded deferred tax expense		4.4
Uncertain tax positions, including interest and penalties, that would favorably impact effective tax rate	8.2	8.2	9.9	3.3
Uncertain tax positions, amount recorded as a direct reduction to deferred tax assets		6.2	6.2
Tax effect of favorable audit resolution	$ 0.8
Minimum number of years certain states keep their statute open (in years)		6 years
Maximum number of years certain states keep their statute open (in years)		10 years

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Stockholders' Equity (Tables)

9 Months Ended

Nov. 01, 2014

Stockholders' Equity Note [Abstract]

Components of Accumulated Other Comprehensive (Loss) Income

The following table sets forth the components of accumulated other comprehensive loss:

	November 1, 2014		February 1, 2014			November 2, 2013
	(In thousands)
Pension liability, net of tax	$	1,751	$	(2,007	)	$	(1,573	)
Cumulative foreign currency translation adjustment 1	889		824			1,593
Total accumulated other comprehensive loss	$	2,640	$	(1,183	)	$	20

¹ Foreign currency translation adjustments are not adjusted for income taxes as they relate to a permanent investment in our subsidiary in Canada.

The changes in components in accumulated other comprehensive (loss) income are as follows:

	39 weeks ended
	November 1, 2014
	Pension Liability			Foreign Currency Translation		Total
	(In thousands)
Beginning balance at February 2, 2014	$	(2,007	)	$	824	$	(1,183	)
Other comprehensive income before reclassifications	—			65		65
Reclassified from accumulated other comprehensive income	3,758			—		3,758
Tax effect on pension liability	—			—		—
Net current-period other comprehensive income	$	3,758		$	65	$	3,823
Ending balance at November 1, 2014	$	1,751		$	889	$	2,640

	39 weeks ended
	November 2, 2013
	Pension Liability			Foreign Currency Translation			Total
	(In thousands)
Beginning balance at February 3, 2013	$	(2,541	)	$	2,731		$	190
Other comprehensive loss before reclassifications	—			(1,138		)	(1,138		)
Reclassified from accumulated other comprehensive income	1,613			—			1,613
Tax effect on pension liability	(645		)	—			(645		)
Net current-period other comprehensive income (loss)	$	968		$	(1,138	)	$	(170	)
Ending balance at November 2, 2013	$	(1,573	)	$	1,593		$	20

Reclassification out of Accumulated Other Comprehensive Income

The details related to the reclassifications out of accumulated comprehensive loss are as follows:

	13 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Amortization of defined benefit plan items:
Net gain	$	3,633	1	$	739		1
Amortization of loss	$	6	1	68			1
Amortization of prior service cost	18		1	18			1
Settlement loss	—		1	577			1
Total before tax	$	3,657		$	1,402
Tax expense	—			(561		)
Net of tax	$	3,657		$	841

	39 weeks ended
	November 1, 2014			November 2, 2013
	(In thousands)
Amortization of defined benefit plan items:
Net gain	$	3,633	1	$	739		1
Amortization of loss	69		1	241			1
Amortization of prior service cost	56		1	56			1
Settlement loss	—		1	577			1
Total before tax	$	3,758		$	1,613
Tax expense	—			(645		)
Net of tax	$	3,758		$	968

¹ These accumulated other comprehensive (loss) income components are included in the computation of net periodic benefit cost (see Note 11).

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Restructuring Program - Summary of Expenses Incurred (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended
	Nov. 01, 2014	Nov. 02, 2013	Nov. 01, 2014	Nov. 01, 2014	Nov. 02, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 1,713	$ 0	$ 4,732	$ 39,221	$ 0
Restructuring Charges
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1,713			39,221
Severance
Restructuring Cost and Reserve [Line Items]
Restructuring charges			2,689
Severance | Restructuring Charges
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1,236			3,749
Lease costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges			152
Lease costs | Restructuring Charges
Restructuring Cost and Reserve [Line Items]
Restructuring charges	146			1,198
Impairment
Restructuring Cost and Reserve [Line Items]
Restructuring charges			0
Impairment | Restructuring Charges
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0			30,497
Other exit costs
Restructuring Cost and Reserve [Line Items]
Restructuring charges			1,891
Other exit costs | Restructuring Charges
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 331			$ 3,777

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Stock-Based Compensation

9 Months Ended

Nov. 01, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

 Stock-Based Compensation

Under the provisions of ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”), all forms of share-based payment to employees and directors, including stock options, must be treated as compensation and recognized in the statement of operations.

On May 8, 2014, the Board unanimously approved the 2014 Omnibus Incentive Plan (the “Omnibus Plan”), which is an amendment and restatement of our Second Amended and Restated 2002 Long-Term Incentive Plan, as amended (the “2002 Plan”). The Omnibus Plan became effective upon stockholder approval at the Annual Meeting of Shareholders on June 30, 2014 (the “Omnibus Plan Effective Date”). The Omnibus Plan includes the following key modifications, effective upon the 2014 Omnibus Plan Effective Date:

• Increase of the Aggregate Share Reserve. The aggregate share reserve increased by an additional 5,900,000 shares of common stock for a total share reserve of 6,113,891 shares of common stock under the Omnibus Plan. As of November 1, 2014, there were 4,863,305 shares outstanding under the Omnibus Plan.

• Cash Performance Awards. The Omnibus Plan includes Cash Performance Awards that may be granted with the intent to comply with the “performance-based compensation” exception under Section 162(m) of the Code. Because Cash Performance Awards may be made in addition to stock-based awards, the 2002 Plan has been renamed the “2014 Omnibus Incentive Plan.”

• Term Extension. We extended the term of the Omnibus Plan until May 8, 2024 (the 2002 Plan was scheduled to expire on June 16, 2021).

Restricted Stock Units

Beginning in fiscal 2013, certain of our employees have been awarded restricted stock units, pursuant to restricted stock unit agreements. The restricted stock units awarded to employees cliff vest at varying times, most typically following between one and three years of continuous service from the award date. Certain shares awarded may also vest upon a qualified retirement at or following age 65, or upon a qualified early retirement under the provisions adopted in 2012 whereby the awardee completes 10 years of service, attains age 55 and retires. All restricted stock units immediately vest upon a change in control of the Company. 

The following table summarizes share-settled restricted stock units outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	230		$	9.05
Granted	322		4.81
Vested	(419	)	6.02
Canceled	—		—
Outstanding as of November 1, 2014	133		$	8.34

Total compensation expense is being amortized over the shorter of the achievement of retirement or early retirement status, or the vesting period.  Compensation expense related to restricted units activity was $0.2 million for the third quarter of 2014 and $1.9 million for the first thirty-nine weeks of 2014. There was no compensation expense related to restricted units for the third quarter of 2013 or the first thirty-nine weeks of 2013. As of November 1, 2014, there was $0.4 million of unrecognized compensation cost related to restricted stock units that is expected to be recognized over the weighted average period of one year.  The total fair value of units vested was $2.4 million during the third quarter of 2014 and $2.5 million during the first thirty-nine weeks of 2014. No units vested during the third quarter 2013 or the first thirty-nine weeks of 2013.

Additionally, beginning in the first quarter of fiscal 2014, certain of our employees have been awarded cash-settled restricted stock units, pursuant to cash-settled restricted stock unit agreements. The cash-settled restricted stock units awarded to employees cliff vest at varying times up to approximately three years of continuous service. Certain shares awarded may also vest upon a qualified retirement at or following age 65, or upon a qualified early retirement under the provisions adopted in 2013 whereby the awardee completes 10 years of service, attains age 55 and retires. All cash-settled restricted stock units immediately vest upon a change in control of the Company.  We may, in our sole discretion, at any time during the term, convert the cash-settled restricted stock units for stock-settled restricted stock units. Currently, we do not have the intent to convert the cash-settled restricted stock units for stock-settled restricted stock units and as a result it is classified as a liability. The cash-settled restricted stock units are treated as liability awards in accordance with ASC 718.

The following table summarizes cash-settled restricted stock units outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	—		$	—
Granted	1,219		3.01
Vested	—		—
Canceled	(103	)	3.01
Outstanding as of November 1, 2014	1,116		$	3.01

Total compensation expense is being amortized over the shorter of the achievement of retirement or early retirement status, or the vesting period.  Compensation expense related to restricted shares activity was $0.4 million for the third quarter of 2014 and $1.1 million for the first thirty-nine weeks of 2014. As of November 1, 2014, there was $2.2 million of unrecognized compensation cost related to cash-settled restricted stock units that is expected to be recognized over the weighted average period of two years.  

Restricted Shares

Certain of our employees and all of our directors have been awarded non-vested stock (restricted shares), pursuant to restricted stock award agreements. The restricted shares awarded to employees generally cliff vest after up to three years of continuous service.  Beginning in November 2012, certain shares awarded after such date may also vest upon a qualified retirement at age 65, or upon a qualified early retirement under the provisions adopted in 2012 whereby an awardee completes 10 years of service, attains age 55 and retires. All restricted shares immediately vest upon a change in control of the Company.  Grants of restricted shares awarded to directors vest in full after one year.

The following table summarizes non-vested shares of stock outstanding as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Outstanding as of February 2, 2014	1,856		$	14.82
Granted	299		4.50
Vested	(533	)	18.44
Canceled	(109	)	12.07
Outstanding as of November 1, 2014	1,513		$	11.70

Total compensation expense is being amortized over the shorter of the achievement of retirement or early retirement status, or the vesting period.  Compensation expense related to restricted shares activity was $2.0 million for the third quarter of 2014 and $2.4 million for the third quarter of 2013.  Compensation expense related to restricted shares activity was $5.7 million for the firstthirty-nine weeks of 2014and$10.0 million for the first thirty-nine weeks of 2013. As of November 1, 2014, there was $6.9 million of unrecognized compensation cost related to restricted shares awards that is expected to be recognized over the weighted average period of one year.  The total fair value of shares vested was $1.5 million during the third quarter of fiscal 2014 and $0.1 million during the third quarter of fiscal 2013. The total fair value of shares vested was $9.8 millionfor the firstthirty-nine weeks of 2014and$7.7 millionfor the firstthirty-nine weeks of 2013.

In connection with the GoJane acquisition, we granted restricted shares to the two individual stockholders of GoJane, with compensation expense recognized over the three year cliff vesting period. If the aggregate dollar value of the restricted shares on the vesting date is less than $8.0 million, then we shall pay to the two individual stockholders an amount in cash equal to the difference between $8.0 million and the fair market value of the restricted shares on the vesting date. As of the third quarter of 2014, we recorded additional compensation expense of $0.6 million and a corresponding liability of $4.0 million based on the Company's stock price as of November 1, 2014. As of the first thirty-nine weeks of 2014, we recorded additional compensation expense of $2.6 million. As of the third quarter of 2013 and the firstthirty-nine weeks of 2013, we recorded additional compensation expense and a corresponding liability of $0.7 million as of November 2, 2013.

On October 31, 2013, we entered into Restricted Stock Award Rescission Agreements with certain executives to rescind 229,760 aggregate shares of restricted stock granted on March 29, 2013 under the Aéropostale, Inc. 2002 Long-Term Incentive Plan. The rescission did not have a material impact on the unaudited condensed consolidated financial statements for any period presented and we recorded $1.0 million of compensation cost during the third quarter of 2013 as a result of rescinding such restricted stock awards.

Performance Shares

Certain of our executives have been awarded performance shares, pursuant to performance share agreements. The performance shares cliff vest at the end of three years of continuous service with us. The shares awarded during fiscal 2013 are contingent upon meeting various separate performance conditions based upon consolidated earnings targets or market conditions based upon total shareholder return targets. All performance shares immediately vest upon a change in control of the Company (as communicated to the executives awarded performance shares). Compensation cost for the performance shares with performance conditions related to consolidated earnings targets is periodically reviewed and adjusted based upon the probability of achieving certain performance targets. If the probability of achieving targets changes, compensation cost will be adjusted in the period that the probability of achievement changes. The fair value of performance based awards is based upon the fair value of the Company's common stock on the date of grant. For market based awards that vest based upon total shareholder return targets, the effect of the market conditions is reflected in the fair value of the awards on the date of grant using a Monte-Carlo simulation model. A Monte-Carlo simulation model estimates the fair value of the market based award based upon the expected term, risk-free interest rate, expected dividend yield and expected volatility measure for the Company and its peer group. Compensation expense for market based awards is recognized over the vesting period regardless of whether the market conditions are expected to be achieved.

The following table summarizes performance shares of stock outstanding as of November 1, 2014:

	Performance-based			Market-based
	Performance Shares			Performance Shares
	Shares	Weighted Average Grant-Date Fair Value		Shares		Weighted Average Grant-Date Fair Value
	(In thousands)			(In thousands)
Outstanding as of February 2, 2014	—	$	—	391		$	20.01
Granted	—	—		676		5.34
Vested	—	—		—		—
Canceled	—	—		(528	)	11.06
Outstanding as of November 1, 2014	—	$	—	539		$	10.37

Total compensation expense is being amortized over the vesting period. Compensation expense related to the market-based performance shares was a benefit of $1.5 million for the third quarter of 2014 and expense of $0.6 million for the third quarter of 2013. Compensation expense related to the market-based performance shares was expense of $0.2 millionfor the firstthirty-nine weeks of 2014 and expense of $1.4 million for the first thirty-nine weeks of 2013. Certain of our performance-based performance shares did not achieve a grant date and therefore are not reflected in the table. As a result of the departure of Mr. Johnson after the end of the second quarter of 2014, we recognized a benefit of $2.0 million during the third quarter of 2014 resulting from the reversal of the related stock-based compensation expense.

The following table summarizes unrecognized compensation cost and the weighted-average years expected to be recognized related to performance share awards outstanding as of November 1, 2014:

	Performance-based		Market-based
	Performance Shares		Performance Shares
Total unrecognized compensation (in millions)	$	—	$	3.2
Weighted-average years expected to be recognized over (years)	0		2

Cash-Settled Stock Appreciation Rights ("CSARs")

In conjunction with the execution of the employment agreement with Mr. Johnson on May 3, 2013, we granted him an award of CSARs, with an award date value of $5.6 million. The number of CSARs granted was determined in accordance with the agreement by dividing $5.6 million by the Black Scholes value of the closing price of a share of the Company's common stock on the award date. The CSARs are currently being treated as a liability based award. For the third quarter of 2014, our expected volatility was 64%, expected term was 0.8 years, risk-free interest rate was 0.09% and expected forfeiture rate was 0%. The CSARs have a term of seven years and will vest in equal 1/3 increments over three years. Additionally, we may, in our sole discretion, at any time during the term, exchange a CSAR for another form of equity which is of equal value to the CSAR at the time of the exchange. For thethird quarter of 2014, we recorded less than $0.1 million of benefit related to this incentive award and $0.3 million of benefit during the first thirty-nine weeks of 2014. For the third quarter of 2013, we recorded less than $0.1 million of benefit related to this award and $0.4 million of expense during the first thirty-nine weeks of 2013. As of November 1, 2014, there was no unrecognized compensation cost related to CSARs.  As a result of the departure of Mr. Johnson after the end of the second quarter of 2014, 2/3 of these CSARs were forfeited. The remaining vested shares will expire within a year from Mr. Johnson's departure date.

Performance Based Bonus

The Employment Agreement with Julian R. Geiger, our Chief Executive Officer, provides for a special performance based bonus. If, during any consecutive 90 calendar day period during the 3^rd year of the term of the Employment Agreement the average closing price per share of the Company’s common stock is $15.93 or higher, Mr. Geiger will be entitled to a performance-based cash bonus equal to 2% of the amount, if any, by which the Company’s average market capitalization during the period with the highest 90 day average stock price during the 3^rd year of the term of the Employment Agreement exceeds $255,360,600 (the “Effective Date Market Cap”). If prior to the achievement of such performance metric (but not during the first 90 days of the term of the agreement), Mr. Geiger’s employment is terminated by the Company without Cause, by Mr. Geiger for Good Reason, upon Mr. Geiger’s death or by the Company due to his Disability, or there is a Change of Control (each a “Qualifying Event”), and as of the date of such Qualifying Event the common stock price exceeds $3.24, then, the amount of the performance-based cash bonus will instead be 2% of the amount, if any, by which the Company’s average market capitalization over the 30 calendar day period immediately preceding the Qualifying Event exceeds the Effective Date Market Cap.

This bonus is a market and service based liability award that is required to be marked-to-market under ASC 718. The fair value of this award is estimated using a Monte-Carlo simulation model. A Monte-Carlo simulation model estimates the fair value of a market based award based upon the expected term, risk-free interest rate, expected dividend yield and expected volatility measure for the Company. Compensation expense for this award is recognized over the vesting period regardless of whether the market condition is expected to be achieved. We have recorded a liability for this award that was immaterial to the unaudited condensed financial statements as of November 1, 2014.

Stock Options

We have an Omnibus Incentive Plan under which we may grant qualified and non-qualified stock options to purchase shares of our common stock to executives, consultants, directors, or other key employees.  Stock options may not be granted at less than the fair market value at the date of grant. Stock options generally vest over four years on a pro-rata basis and expire after eight years. All outstanding stock options immediately vest upon (i) a change in control of the Company (as defined in the plan) and (ii) termination of the employee within one year of such change of control.

The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model requires certain assumptions, including estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of our common stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). For the first thirty-nine weeks of 2014, our expected volatility was 52.8% to 56.1%, expected term was 3.96 to 5.00 years, risk-free interest rate was 1.17% to 1.58% and expected forfeiture rate was 0%. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation and consequently, the related amount recognized in the unaudited condensed consolidated statements of operations.

The effects of applying the provisions of ASC 718 and the results obtained through the use of the Black-Scholes option-pricing model are not necessarily indicative of future values.

The following table summarizes stock option transactions for common stock during the first thirty-nine weeks of 2014:

	Number of Shares		Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In millions)
Outstanding as of February 2, 2014	377		$	16.61
Granted	2,030		3.24
Exercised	—		—
Canceled1	(110	)	13.84
Outstanding as of November 1, 2014	2,297		$	4.93	2.63	$	—
Options vested as of November 1, 2014 and expected to vest2	2,297		$	4.93	2.63	$	—
Exercisable as of November 1, 2014	262		$	17.78	0.75	$	—

¹ The number of options canceled includes approximately 105,000 expired shares.

² The number of options expected to vest takes into consideration estimated expected forfeitures.

Included in the table above and in connection with his employment agreement, Mr. Geiger was granted an award of options to purchase 2.0 million shares of our common stock. These stock options have a strike price of $3.24 per share, vest over three years on a pro-rata basis, and have a seven year life.

We recognized $0.2 million in compensation expense related to stock options during the third quarter of 2014 and less than $0.1 million during the third quarter of 2013.   We recognized $0.2 million in compensation expense related to stock options during the first thirty-nine weeks of 2014 and less than $0.1 million during the first thirty-nine weeks of 2013. For the first thirty-nine weeks of 2014andthirty-nine weeks of 2013, the intrinsic value of options exercised was zero.

The following table summarizes information regarding non-vested outstanding stock options as of November 1, 2014:

	Shares		Weighted Average Grant-Date Fair Value
	(In thousands)
Non-vested as of February 2, 2014	10		$	6.41
Granted	2,030		3.24
Vested	—		—
Canceled	(5	)	6.43
Non-vested as of November 1, 2014	2,035		$	3.25

As of November 1, 2014, there was $2.8 million of unrecognized compensation cost related to non-vested options that we expect to be recognized over the remaining weighted-average vesting period of three years.