Tags: american apparel | closing | financial | pressure

American Apparel Closing? Clothing Brand Faces More Financial Pressures

Image: American Apparel Closing? Clothing Brand Faces More Financial Pressures
An American Apparel store is seen on June 19, 2014 in New York City. American Apparel's board has voted to remove the company's controversial CEO, Dov Charney. (Andrew Burton/Getty Images)

By    |   Wednesday, 19 Aug 2015 12:17 PM

American Apparel, the made-in-the-USA clothing brand that boasts 237 retail stores in 20 countries, could be closing in the next 12 months due to financial pressures.

"We believe that we may not have sufficient liquidity necessary to sustain operations for the next 12 months," the company said in a Tuesday press release, CNN Money reported.

"The decline in comparable sales was attributable to the lack of new style introduction for the spring and summer selling season," it continued, referring to last quarter's 17 percent sales decrease.

The news was met negatively by investors, and company stock fell 8 percent on Tuesday. Its stock is down more than 86 percent over the past year.

While the company expects to post losses for the rest of the year, it also announced that it would reorganize its debt, and extend a $50 million line of credit to $90 million. It also plans to cut costs by $30 million in the next year and a half. It currently has roughly 10,000 employees.

The company's balance sheet shows it has roughly $7 million in cash-on-hand.

The brand sacked founder Dov Charney last summer after years of sexual harassment allegations against him, and replaced him with Paula Schneider. Charney sued over the firing.

According to Sky News, American Apparel's market value has shrunk from $540 million to $90 million over the last five years.

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American Apparel, the made-in-the-USA clothing brand that boasts 237 retail stores in 20 countries, could be closing in the next 12 months due to financial pressures.
american apparel, closing, financial, pressure
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2015-17-19
Wednesday, 19 Aug 2015 12:17 PM
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