In the restructuring world, the company now has the dubious distinction of having filed for what is colloquially known as "Chapter 22" — that is, Chapter 11 bankruptcy for a second time.
"The company faced unfavorable market conditions that were more persistent and widespread than the debtors anticipated," American Apparel chief restructuring officer Mark Weinsten said in a court filing. "These market conditions were particularly detrimental to retailers."
He said American Apparel's turnaround strategy "completely failed" as the company reported a 33% decline in year-over-year sales as of Sept. 30.
Canadian clothing manufacturer Gilden Activewear agreed to a deal to acquire certain assets from American Apparel, including the chance to maintain some or all of the company's Los Angeles production and distribution operations, according to a court filing.