Home / Knowledge / News / Fashion / American Apparel files for bankruptcy after huge losses
American Apparel files for bankruptcy after huge losses
06
Oct '15
American Apparel Inc., a clothing chain known for provocative marketing and boardroom drama, has filed for bankruptcy protection after years of losses.

As part of a prearranged Chapter 11 restructuring, the Los Angeles-based company will reorganize its debts, which have which have grown bigger than its assets. More than $200 million of bonds will be exchanged for equity interests in the reorganized company, it said in a press release. American Apparel will remain in business during the process.

Under the restructuring support agreement, American Apparel's secured lenders will provide approximately $90 million in debtor-in-possession (DIP) financing. These supporting creditors have committed $70 million of new capital to support the reorganization and recapitalization of the business. The company anticipates that such financing will be more than sufficient to fund its ongoing operations and pave the way for a successful reorganization. As a result of the reorganization, American Apparel's debt will be reduced from $300 million to no more than $135 million, and annual interest expense will decrease by $20 million.

"This restructuring will enable American Apparel to become a stronger, more vibrant company. By improving our financial footing, we will be able 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," said Paula Schneider, American Apparel's Chief Executive Officer.

American Apparel's filing for bankruptcy follows a clash between the company's controversial founder Dov Charney and the board that led to his ouster last year, but the company had been in financial crisis for much longer. Successive losses every year since 2010 whittled down the company's worth and by the end of June 2015, American Apparel ended up with a negative book value with liabilities ballooning to $161 million more than its assets. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Courtesy: Pexels

Textiles | On 15th Jul 2018

WCO publishes global standards on e-commerce

The World Customs Organization (WCO) has published the Framework of...

Courtesy: M Dohmen

Textiles | On 15th Jul 2018

Archroma takes remaining minority shares in M Dohmen

Archroma, leader in colour and specialty chemicals towards...

Courtesy: Reebok

Fashion | On 15th Jul 2018

Reebok, CFDA join hands to nurture America's fashion

Global fitness and lifestyle brand Reebok has joined hands with the...

Interviews View All

Nuno Venda
ROQ

‘There has been an increase in demand for water based inks, rather than...

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Abhishek Pachauri

Reckon Industries is into manufacturing of textile process house machines, ...

Karan Behal

Karan Behal, founder and chief executive of top-selling brand...

Paolo Crespi

For.Tex is an Italy-based leading producer of dyes and thickeners, and is...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


July 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search