Fans of lycra, butts and tube clothes, we come bearing bad news: L.A.-based garments retailer American Apparel submitted for part 11 bankruptcy protection Monday early morning.
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The brand launched the news headlines virtually one-year after parting with ousted president Dov Charney, and it has agreed to a debt-for-equity transformation deal with loan providers (worth above $200 million), in accordance with . (Meaning bondholders can swap their financial obligation for shares inside organization.)
Thage brand’s bankruptcy news shouldn’t come as an industry shock, though. Sales continue to fall one-fourth after quarter, and over the last five years, losses have hit a high of $340 million, according to NYT. The retailer is troubled by a number of different issues, including outrage over its racy ads and an ongoing lawsuit with Charney (who was repeatedly accused of workplace sexual harassment) — all of which have made it difficult to engineer a turnaround.
“Our debt load just had beenn’t lasting. You can’t do a turnaround plan without money, ” Paula Schneider, the brand’s veteran retail exec, informed NYT. “Every day, we might make alternatives about what we had been going to get, and even though we required more for everyone. Every day, I have to pick between what I’m buying for retail or wholesale, or giving e-commerce enough money to develop a mobile app.”
What exactly does this suggest for American Apparel staff members currently doing work in its 130 U.S. shops? Since Monday morning, there was clearly no talk of layoffs or shop closures — however. And clothing will continue to be produced in The united states, after the manufacturing intend on which the company had been launched.
“We will continue to manufacture in the us, ” Schneider stated. “That’s exactly what the brand name is. That’s exactly what it is about.” So don’t stress, you've kept time for you to replenish on your own teeny-tiny, mockneck, cutout crop tops — but we wouldn’t wait long.
Exactly what do you think of US Apparel’s bankruptcy development? Did you see it coming? Share under!
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