American Apparel, one of the trendiest clothing brands of the early 2000s, filed for Chapter 11 bankruptcy in Delaware, according to a October 5 press release from the company.
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“This rebuilding will assist American Apparel to turn into a healthier, more exciting company”, said ceo Paula Schneider within a declaration.
Unlike RadioShack and Blockbuster, whose business model became virtually obsolete, analysts said American Apparel’s restructuring could be more rewarding for the hedge funds. “We use this to stay occupations inside the United states.S. and maintain the values for which is a situation enterprise stands”. The restructuring plan is subject to approval by the bankruptcy court and must meet other certain conditions, it said.
Despite the major hit American Apparel is taking, there has been no discussions of layoffs or store closures.
American Apparel expects to pay all its suppliers in full, and its worldwide operations aren’t affected by the bankruptcy.
The apparel retailer has reportedly struck a restructuring agreement with its secured lenders to operate its stores and U. J.C. Penney has announced plans to launch a new brand specifically targeted at the fast-fashion market, and CEO Marvin Ellison explained at a recent conference that the company had been studying fast fashion’s successful tactics closely.
Shares of the company, which began trading publicly in 2007, peaked at $16.80 in December of that year. This process is known as a debt-for-equity conversion. These supporting creditors have committed $70 million of new capital to support the reorganization and recapitalization of the business.
” e never graduated, setting off instead for South Carolina, where he employed 20 women to make T-shirts in a barn with no air conditioning”, the news source recalled.
Bankruptcy for the company had appeared probable for a few time, – the company reported losses of $19.4 million in the second quarter of this year which represented its 10th consecutive quarterly loss. In 1997 he moved the company to Los Angeles, where there was greater manufacturing capacity. As we reported at the time, the company did not provide details of the complaints, but Charney had been the target of lawsuits alleging sexual misconduct. He also attracted litigation and scrutiny from regulators for his employment practices. Many large corporations that have struggled financially have filed for bankruptcy in the past including: General Motors, K-Mart and American Airlines.
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“The company said in a court filing that it plans to shed unprofitable stores, though it did not identify how many”.
