American Apparel Outfitters

American Apparel Files for Bankruptcy Protection

Known for its stark and periodically questionable marketing, American Apparel faced a sales slump in recent years. United States Apparel

Many years of controversial marketing could not conserve United states Apparel from a visit to bankruptcy courtroom.

These days, the long-troubled organization, unprofitable for half ten years, filed for part 11 personal bankruptcy defense, section of an equity arrangement with lenders built to trim its debt from $300 million to $135 million. Loan providers will offer about $160 million in funding and new capital to help keep the organization working during a six-month restructuring phase. All told, United states Apparel had roughly 9, 000 workers and runs 227 stores in 19 countries.

The filing had not been unanticipated, specially since American Apparel has posted one profitable quarter in past times 5 years, and its own stock has been trading recently around 12 dollars per share. Sales for its second one-fourth dropped 17 %, and contains lost about $300 million since 2009. Over time, the organization neglected to hold speed with style styles, many believed it overcharged for basic things like T-shirts and slacks.

"I would personally contend that American Apparel happens to be and continues to be significantly outflanked by its competitors, including Urban Outfitters, Forever 21, US Eagle, H&M, Zara and, of late, TopShop, " said Scott Davis, main growth officer at Prophet, a brand consultancy. "United states attire has lost relevancy and therefore lost its ability to encourage, influence and compel customers to select their apparel over more powerful brands in category."

To some degree, the company is similar to its president and former chief executive, Dov Charney, whom cultivated a bad-boy image, championed salacious advertising and had been reported in a number of sexual-harassment matches by previous staff members before his ouster this past year. Brand new CEO Paula Schneider, an old Warnaco manager just who took over as 2015 started, toned things down considerably. Like, United states Apparel's Tumblr, as soon as filled with quasi-pornographic shots of panties at half-mast and topless feminine designs, is decidedly G-rated, with increased sedate fashion images on screen.

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