American Apparel, official outfitter of Williamsburg, Brooklyn, has seen business decline faster than the neckline of an Organic Fine Jersey Short Sleeve V-Neck over the past few years.
Despite a resilient effort to remain relevant, everyone’s favourite erotic poster manufacturer downtown LA success story from half a decade ago admitted yesterday that it might not survive the next year.
According to a regulatory filing, American Apparel believes it “may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that [it] may be able to continue as a going concern.”
Sales for its second quarter fell 17.2% to $134.4 million, and the company’s next interest payment of $13.9 million is more than the cash American Apparel has on hand and more than its current borrowing capacity.
The forecast from Wall Street is equally bleak: American Apparel shares have fallen 87% this year and were trading at 14 cents at market’s close on Monday.
A few last-ditch options are being considered to save the eco-friendly retailer – refinancing debt, raising new equity and other restructuring, new capital raising transactions – none of which can solve the reality that people just aren’t buying organic leggings and leotards anymore.
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