American Apparel - H 2015
AP ImagesIt’s been a rough year of lawsuits and losses for American Apparel, and now the company has reported that a depleted cash reserve and plummeting sales could result in the retailer’s demise within the next 12 months.
Earlier this year, the company reported $26 million in losses, however, CEO Paula Schneider, who officially took over the position in December of 2014, attributed the astronomical numbers to the company’s restructuring process as it worked to revamp everything from ad imagery to store design to the clothes themselves.
But despite measures to keep the brand afloat — including the sale of $10 million in shares, the shutdown of several stores and an office downsize at the L.A. headquarters — American Apparel posted a 17 percent decline in sales last quarter, according to the Los Angeles Times. Analysts at the paper speculated that regardless of cost-cutting measures, the brand’s outlook is not so bright, comparing the retailer’s situation to “trying to save the Titanic when the bow is already 10 feet underwater.”
With a total of over $235 million in long-term debt — not including legal fees from the company’s ongoing saga with former CEO Dov Charney — the future of American Apparel is looking grim.
