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American Apparel files for bankruptcy in US American Apparel files for bankruptcy in US
(35 minutes later)
American Apparel has filed for bankruptcy in the US less than a week after the fashion chain’s UK operation appointed administrators.American Apparel has filed for bankruptcy in the US less than a week after the fashion chain’s UK operation appointed administrators.
The US bankruptcy filing is American Apparel’s second in just over a year as the once-prestigious brand, which boomed before the financial crisis, failed to recover from years of losses amid more frugal times. The filing is American Apparel’s second in the US in just over a year as the once-prestigious brand, which boomed before the financial crisis, failed to recover from years of losses amid more frugal times.
American Apparel filed for bankruptcy in the US for the first time in October 2015. It emerged from bankruptcy in February 2016 under the ownership of a group of former bondholders led by the hedge fund Monarch Alternative Capital LP. The retailer first filed for bankruptcy in the US in October 2015. It emerged from that in February 2016 under the ownership of a group of former bondholders led by the hedge fund Monarch Alternative Capital LP.
But the company continued to suffer falling sales and tried to find a buyer. American Apparel has also suffered from the wider malaise affecting US clothes retailers who target young people, who are spending less on clothes and visiting shopping malls less frequently. But the company’s sales continued to fall and it tried to find a buyer. It has suffered from the wider malaise affecting US clothes retailers who target young people, who are spending less on clothes and shopping less often.
The latest bankruptcy filing at a Delaware court showed American Apparel listed assets and liabilities in the range of $100m to $500m (£80m-£400m).The latest bankruptcy filing at a Delaware court showed American Apparel listed assets and liabilities in the range of $100m to $500m (£80m-£400m).
Gildan Activewear, a Canadian clothes manufacturer, said it had agreed to buy global intellectual property rights related to the American Apparel brand and certain assets from American Apparel for about $66m in cash. It will also buy stocks of clothes but the deal does not include any retail stores. Gildan Activewear, a Canadian clothes manufacturer, said it had agreed to buy global intellectual property rights related to the American Apparel brand and certain assets from American Apparel for about $66m in cash. It would also buy stocks of clothes but the deal did not include any retail stores.
American Apparel’s image has been beset by lurid allegations against its founder, Dov Charney. His unpredictable behaviour added to American Apparel’s appeal until a series of sexual allegations started to tarnish the brand. American Apparel’s image has been beset by lurid allegations against its founder, Dov Charney. His unpredictable behaviour added to American Apparel’s appeal until a series of sexual allegations began to tarnish the brand.
Charney, who was fired as chief executive almost two years ago, was alleged to have masturbated in front of a female journalist and reportedly sent explicit texts to employees. The allegations added to unease about American Apparel’s racy advertising, often featuring young female employees.Charney, who was fired as chief executive almost two years ago, was alleged to have masturbated in front of a female journalist and reportedly sent explicit texts to employees. The allegations added to unease about American Apparel’s racy advertising, often featuring young female employees.
American Apparel expanded to more than 200 stores in more than 20 countries, including the UK where it had 18 outlets when it first filed for bankruptcy last year. Its remaining British business, including 13 stores, went into administration on 8 November. It is likely to close after Christmas. American Apparel grew to have more than 200 stores in more than 20 countries, including the UK, where it had 18 outlets when it first filed for bankruptcy last year. Its remaining British business, including 13 stores, went into administration on 8 November. It is likely to close after Christmas.
Charney launched American Apparel while at university in 1989, combining sexy, fashionable clothing with ethical production. Instead of making clothes at low cost in Asia, Charney opened a factory in Los Angeles, paid good wages and used “made in USA” as his strapline.Charney launched American Apparel while at university in 1989, combining sexy, fashionable clothing with ethical production. Instead of making clothes at low cost in Asia, Charney opened a factory in Los Angeles, paid good wages and used “made in USA” as his strapline.
The approach worked when the economy was booming and young shoppers were prepared to pay $28 for a plain T shirt. But consumers tightened their belts after the financial crisis peaked in 2008, leading to falling sales and rising debt. The approach worked when the economy was booming and young shoppers were prepared to pay $28 for a T-shirt. But consumers tightened their belts after the financial crisis peaked in 2008, leading to falling sales and rising debt.