American Apparel Reports $26 Million Loss in the First Quarter
The L.A.-based apparel company also has announced that it will sell $10 million in stock to keep the brand afloat.
The last few years have not been good to American Apparel. Continually falling sales, controversy surrounding former CEO Dov Charney (and then more controversy surrounding his firing) followed by lawsuit after lawsuit after lawsuit has made for a rough few months for new CEO Paula Schneider, who was only appointed officially last December.
Now, WWD has reported that the ailing retailer lost $26.4 million in the first quarter of 2015 (with sales down 9 percent), compared to a loss of $5.5 million during the same period last year. American Apparel announced that it would sell $10 million in stock to keep the brand afloat while Schneider works to restructure the company.
"We’re moving in the right direction," Schneider told the trade. "This is a major process, and this is a major turnaround. This is not a brand problem, it's an execution problem."
Some major changes that already have been implemented since Schneider took the reigns include the hiring of former Band of Outsiders menswear designer Joseph Pickman, as well as the decision to tame the retailer's notoriously racy ads and replace them with more female-friendly ones. The decision to cut slow-moving merchandise from the inventory to make room for improved future offerings also has contributed to the low sales numbers.
However, for Schneider, the losses are simply part of the recovery process. "We're sort of flying an airplane while we're building it," she said of the challenges currently facing the company but added, "We're not going to be talking about this [turnaround] in three years."