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APP issues statement in response to baseless & frivolous lawsuit

13
Nov '08
American Apparel Inc issued the following statement in response to news reports of a frivolous and baseless lawsuit recently filed by a disgruntled former employee:

American Apparel denies all of the allegations in Mr. Hernandez's lawsuit and will vigorously defend itself and its shareholders in this contemptible action. Mr. Hernandez was a non-accounting employee in the information technology department who was terminated for legitimate reasons.

The allegations in this lawsuit are fictional, which the company believes represents a cynical attempt to extract phony leverage by Mr. Hernandez's counsel, Keith Fink, who has been engaged with the company in other litigation for over three years. The facts are that Mr. Charney had no personal management responsibility nor influence over the work of Mr. Hernandez and played no role in his termination in 2006.

American Apparel is proud of its performance and its business success. In an industry that is struggling due in part to very challenging economic conditions, American Apparel was one of only a handful of companies that reported strong sales in October, leading the industry with a same-store sales increase of 22%. In addition, this week the company reported record revenue of $154.8 million for the third quarter of 2008, exceeded analysts' earnings estimates, and re-affirmed its full-year earnings guidance.

It is unfortunate that the media continues to focus on sideshows and false allegations. It does a disservice to the 10,000 men and women who make American Apparel such an outstanding company; to our customers who love our products; and to our investors who appreciate our strong financial performance and our dedication to being a leading public company. We are confident that these allegations will be dismissed and look forward to our day in court.

American Apparel is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel based in downtown Los Angeles, California. As of October 31, 2008, American Apparel employed over 10,000 people and operated more than 230 retail stores in 19 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea, and China.

American Apparel Inc


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