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American Apparel, Best Known For Racy Ads, Files For Chapter 11 Bankruptcy

American Apparel has actually recorded for section 11 personal bankruptcy defense almost annually following the ousting of creator and CEO Dov Charney. Spencer Platt/Getty Graphics hide caption

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American Apparel features submitted for part 11 personal bankruptcy protection almost annually following the ousting of president and CEO Dov Charney.

Spencer Platt/Getty Images

United states Apparel, the stylish clothes business maybe best-known because of its racy, sexually charged adverts, filed for section 11 personal bankruptcy security on Monday.

The made-in-the-U.S.A. garments string announced it had reached an agreement with 95 % of its secured lenders to set up place just what its phoning "a thorough change strategy to revitalize the business enterprise and brand name." The organization says it's going to hold production and businesses into the U.S.

The restructuring contract, that the business says was authorized by its board of directors, will significantly decrease American Apparel's debt and interest payments through the elimination of a lot more than $200 million of its bonds in return for equity passions when you look at the reorganized business.

"This restructuring will allow American Apparel to become a more powerful, much more radiant organization. By increasing our financial ground, I will be able to refocus our business attempts from the execution of your turnaround method as we aim to produce brand new and appropriate products, introduce new design and merchandising projects, invest in new stores, grow our e-commerce company, and create captivating brand-new marketing promotions that can help drive our business ahead."

The Los Angeles-based organization has been struggling since last year's community ouster of its creator and chief executive officer. And NPR business correspondent Yuki Noguchi tells our Newscast unit:

"American clothing made its title featuring its standard cotton T-shirts and tank tops as well as its edgy, sexualized marketing and advertising. Nevertheless the Los Angeles-based company has actually a sizable property impact, and its particular product sales have been around in decline. Just last year, the business also contended with a messy battle to oust its founder and leader, Dov Charney. The organization is attempting to restructure using backing of the lenders who does put up brand new capital. The organization says the filing wont impact its retail procedure, nonetheless it failed to say whether or not it would in the course of time close stores."

Due to the fact Two-Way reported a year ago, the board of United states Apparel voted to displace Charney in the wake of allegations against him. Even as we reported at the time, the company did not offer information on the issues, but Charney was in fact the mark of legal actions alleging sexual misconduct.

United States Of America Today states that since their treatment as CEO, Charney has sued American Apparel. The book in addition reports the company hasn't held up really facing other competitors vying for young customers.

"American Apparel, which flirted with bankruptcy around 2011, features about 8, 500 staff members at six factories and 230 shops into the U.S. and 17 countries. The organization notoriously bet its business model on clothing made in the U.S.

"the business stated in a court filing it intends to drop unprofitable stores, though it didn't identify how many.

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