American Apparel Bankruptcy News
American Apparel Bankruptcy News – American Apparel Inc. will more than likely be going bankrupt at some point in the future. They announced today that they do not have the liquidity to sustain the business over the course of the next year.
The news pushed shares for the company down nearly 30% to an all-time low.
It has been known that the company was facing hard times, but it is surprising that the company is so close to going under.
The enterprise also said that it might fall out of compliance with a credit agreement by September 30th. They are currently scrambling to work with a lender to amend the agreement, but cautioned investors, saying that without a reprieve there may be a damaging financial chain reaction that could force the company to pay both credit lines immediately.
They are known for their racy ads and solid clothing, but the company has been unable to deal with expanding rapidly after going public in 2007. They now operate about 290 stores in over 19 countries.
The company lost $5 to $7 million last quarter, with a $7.3 million loss in the second quarter.
They expect their revenue to continue to fall in the coming months, and things are not looking good for the future of the company. Revenue in stores that have been open at least one year fell as much as 16 percent during the quarter. It will be interesting to see if the huge company is ready to rebound.
Category: Fashion News