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American Apparel Founder Says Company Couldn’t Survive Without Him

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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. 

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American Apparel Seeks Bankruptcy Protection a Second Time

Submitted by jhartgen@abi.org on
American Apparel Inc. filed for bankruptcy less than a year after ending its first stint under court protection, and agreed to sell the brand to Gildan Activewear Inc., a Canadian maker of T-shirts and underwear, for about $66 million, Bloomberg News reported today. American Apparel filed for protection from creditors today, Gildan said in a statement. The Montreal-based company said that it is not buying any stores. American Apparel’s founder, Dov Charney, was fired in 2014 over allegations of misconduct. He fought unsuccessfully to regain control of the business he started as a college student. American Apparel’s results only got worse, and it filed for bankruptcy in October 2015. The retailer shed $200 million in debt and emerged from that bankruptcy early last year when former bondholders, led by Monarch Alternative Capital, took over. But a plan to return to the company’s roots and focus on basic items like T-shirts and skirts wasn’t enough to improve results.
 
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Fashion Company Nasty Gal Reportedly Filing for Bankruptcy

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Online clothing retailer Nasty Gal is reportedly filing for bankruptcy in order to restructure after two years of financial troubles, The Guardian reported today. The company was founded by Sophia Amoruso, who will be resigning as executive director of the company as it files for chapter 11 and restructures. The company has seen consecutive rounds of job losses over the past two years. Amoruso founded Nasty Gal at the age of 22 and grew the business into a reported $100 million online empire. It recently waded into politics after the then presidential candidate, Donald Trump, called his rival Hillary Clinton a “nasty woman” during a presidential debate. The retailer temporarily changed its branding and began selling “nasty woman” emblazoned clothing.
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Mall Landlords Dive Deeper Into Retail Assets

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The largest mall and strip center landlords in the U.S. are trying to combat a wave of store closures by dipping into their own pockets, The Washington Post reported yesterday. Some are acquiring retailers outright, while others are buying up space from department stores and snapping up other retail locations. General Growth Properties, the second-largest real-estate investment trust by number of properties, said it bought five stand-alone stores from Macy’s Inc. for $48 million since the beginning of the third quarter. Retail property landlords are battling a storm in the retail sector sparked by consumers’ changing shopping habits. To win, they must identify which new investments could best recapture shoppers’ attention. They also must convince investors that snapping up properties and companies are promising growth strategies that improve their competitiveness. Landlords also are diving directly into the retailing business. In September, General Growth and Simon Property Group joined a consortium to acquire Aéropostale Inc., which helped the clothing retailer stave off liquidation.
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American Apparel Re-engages with Potential Buyers in Bankruptcy Deal

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American Apparel LLC has resumed talks with at least two potential bidders for the U.S. teen clothing retailer, after bankruptcy sale negotiations with brand licensor Authentic Brands Group LLC stalled earlier this week, Reuters reported yesterday. American Apparel is looking for a buyer as it prepares for its second bankruptcy in as many years. The company is discussing a bankruptcy sale to brand licensor Sequential Brands Group Inc. and financial services company B. Riley Financial Inc., among others. American Apparel had been close to agreeing to a sale to Authentic Brands earlier this week and it remains interested. If American Apparel does not come to an agreement with a buyer, it will file for bankruptcy and run a sale process after. The company said on Tuesday that it was winding down its operations in the U.K. Any potential deal to sell its business in the U.S. must ensure that American Apparel continues to manufacture in that country, despite cheaper alternatives overseas.
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Tommy Hilfiger: Going Bankrupt in My 20s Taught Me More Than an MBA

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Today, fashion designer Tommy Hilfiger is the founder of his eponymous clothing company, but when he was in his early 20s, he was an aspiring entrepreneur struggling to break even, CNBC reported today. Hilfiger said the early financial struggles served as his real-life MBA. "I was bankrupt when I was under 25 years old. I was in my mid-20s with my first business," Hilfiger said. "That was the best learning experience I ever had. It was my MBA." When he was a living in Elmira, N.Y., he opened a clothing store called People's Place in 1969 with $150, which he writes about in his new memoir. Business was booming, and Hilfiger decided to forego college and start opening new stores across the state. But soon after, Hilfiger's accountant told him that the company had run out of money and that he needed to file for chapter 11. It was a turning point that forced Hilfiger to get serious about business. In the years following the bankruptcy, he rebuilt his business model and went on to launch the Tommy Hilfiger brand in 1985. He relentlessly pursued major retailers until the retailers finally bought shipments. Hilfiger's fashion empire now spans 115 countries and more than 1,600 stores.
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Finish Line Said to Seek Buyer for Its JackRabbit Runners Chain

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Finish Line Inc. is looking for a buyer for its JackRabbit chain of specialty running-shoe stores, marking a turnabout from an ambitious expansion in that category, Bloomberg News reported yesterday. The division, which has about 70 locations under various names, could draw interest from private equity firms and other sporting-goods chains. Finish Line previously expanded by buying up small, regional running stores, including its 2011 acquisition of the Running Co. After buying New York-based JackRabbit, it decided last year to rebrand all its specialty running stores with that name.

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Offenbachers Going Out of Business After Filing for Chapter 11

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Offenbachers, a Lanham, Md.-based outdoor furniture and recreation products retailer, is going out of business after a bankruptcy judge approved the liquidation yesterday, the Baltimore Sun reported today. The retailer will liquidate more than $9 million of inventory, fixtures and equipment in a sale that begins today at its eight stores in Virginia and Maryland. The company, formally known as ACP-Offenbachers LLC, filed for a chapter 11 protection on Monday. Offenbachers was founded in 1960 as a pool maintenance and lifeguard services company and opened its first store in in 1972 in Rockville, Md. The company evolved to sell indoor and outdoor furniture, and outdoor entertaining equipment, such as bars, grills and fireplaces.

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