American Apparel Inc. founder Dov Charney, who was ousted by his own board for misconduct in 2014, said the retailer’s latest bankruptcy filing shows that the company can’t stay afloat without him, Bloomberg News reported yesterday. The largest producer of American-made clothing filed for bankruptcy yesterday, just nine months after ending its first stint under court protection. Even with an injection of cash and a reduction in debt, a turnaround plan led by Paula Schneider, who replaced Charney as CEO, failed to revive American Apparel’s fortunes. The Los Angeles-based company plans to sell itself at auction to Gildan Activewear Inc., which has a leading offer of $66 million. Gildan will continue selling American Apparel’s basics, like plain T-shirts, to screenprinters and promotion companies. But the bid doesn’t include American Apparel’s almost 200 stores, so if it lives on as a consumer-facing brand under Gildan, it would have to be sold through other retailers. Read more.
Top restructuring experts will discuss the trend of retail bankruptcies and lessons to be learned from “chapter 22” filings at ABI’s Winter Leadership Conference. Click here to register.
