American Apparel Files For Bankruptcy
More bad news for the brand.
American Apparel is on its last legs.
According to WWD, the company will receive roughly $90 million in debtor-in-possession financing, with $70 million going towards the company's ongoing restructuring process. This will cut the brand's debt from roughly $300 million to approximately $135 million and allow them to continue operating.
In the past year since CEO Paula Schneider took the reins at the company from the controversial hands of founder Dov Charney, American Apparel has implemented several cost-cutting measures, including an office downsize as well as the closing of several store locations. In addition to these efforts, the store also underwent a rebranding process which affected everything from merchandising to design to ad campaigns. Despite the changes, however, the company reported over $26 million in losses during the first half of 2015.
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Schneider maintains a hopeful lookout, insisting that the brand's overhaul is still very much a work in progress toward creating "a stronger, more vibrant company." In a statement, she remarked that the financing will help the brand "to refocus our business efforts on the execution of our turnaround strategy as we look to create new and relevant products, launch new design and merchandising initiatives, invest in new stores, grow our e-commerce business and create captivating new marketing campaigns that will help drive our business forward.”