Between lawsuits, investigations and pressure from investors, American Apparel has its fair share of troubles over the past year and a half. But things don’t look to be getting any better for the retailer, as it announced today it doesn’t have enough financing to continue operations for another year.
The Associated Press reports that American Apparel is looking at options such as raising money, refinancing, new capital-raising moves and restructuring its debt in order to support its operating costs.
The company’s recent issues – including dealing with the behavior and subsequent lawsuits involving ex-CEO and founder Dov Charney – have only exacerbated its financial problems.
According to the AP, the Los Angeles-based company has lost money every year since 2010. The company estimates that it lost $19 million in just the past quarter, bringing its total loss of the year, so far, to $46 million – double its losses from the year before.
News of the company’s inability to meet operating costs comes just a month after it announced it would undergo a $30 million cost-cutting effort in an attempt to return to its former funky glory.
The company launched a restructuring plan that includes cutting jobs and closing stores over the next 18 months.
While the company didn’t specify how many jobs would be cut or stores would be closed, it said the new plan is an attempt to adapt to the changing retail industry while preserving jobs for the “overwhelming majority” of its 10,000 employees.
American Apparel says it doesn’t have enough financing [The Associated Press]
by Ashlee Kieler via Consumerist
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