American Apparel topples into bankruptcy again

Made-in-the-USA retailer American Apparel filed for Chapter 11 bankruptcy protection early Monday after its latest turnaround plan flopped.

The move comes about a year after the fashion retailer filed for bankruptcy for a first time. The company exited court protection in early 2016 but quickly encountered trouble again.

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.


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