Is Aeropostale, Inc. (ARO) One of the Best Companies in America?

World: Aeropostale, Inc. (NYSE:ARO) has a Vendor Code of Conduct through which it tries to make sure the people who make its clothes are treated decently, and given healthy and safe working environments. It requires its suppliers to adhere to its rules, and has a factory inspection program. Overseas clothing manufacturing can be an inhumane and unsafe business, so Aeropostale’s ahead of many of its retail peers on this factor. Aeropostale also has several initiatives that are part of the Aero Gives program, through which it practices charitable giving to those in need.

The case against
Whatever Aeropostale, Inc. (NYSE:ARO) was doing right in its business sense for many years running has soured in more recent history. The retailer’s recent tidings about the fourth-quarter — the all-important holiday quarter — sadly showed that a turnaround isn’t a foregone conclusion anytime soon. Teen retail is a cutthroat industry, complete with a very fickle customer base that will defect to competitors in the blink of an eye. Macroeconomic difficulties can make it even worse, since parents have fewer discretionary dollars for kids, and teen unemployment has been a major problem for years, as retail jobs have gone to older, more experienced people desperate for work. Despite continued disheartening trends in its business over the last year, Aeropostale inexplicably acquired an online women’s fashion retailer called GoJane.com. Maybe it can acquire its way to growth, but that’s a risky strategy for any company (and for its shareholders, too). Although the company’s apparent respect for teens is an interesting twist, some of its efforts feel like they fall short. The Aero Cares fund for employees beset by hardship is interesting — but it appears that it relies solely on employee contributions for their fellow workers. Is the company’s top brass adding to the kitty, as well? It would be nice to know.

Foolish bottom line
Aeropostale’s business strategy has gone off the rails; retail turnarounds aren’t easy and, so far, shareholders have seen few signs that this retailer will regain its fashion sense anytime soon. Although Aeropostale has some surprising positive factors, it simply didn’t make it into our Top 25 Best-Run Businesses list; the retailer has plenty of areas where it needs to work a whole lot harder.

The article Is Aeropostale One of the Best Companies in America? originally appeared on Fool.com.

Alyce Lomax has no position in any stocks mentioned. The Motley Fool owns shares of Aeropostale.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.