AMERICAN APPAREL 2015 : THE FINANCIAL SITUATION IS GETTING WORSE
The financial situation of American Apparel, cantoir of the « made in America », has gotten so worse that the group could very much be out of liquid assets to honor its depts in the next twelve monthes. This is according to a stock market document recently released.
In Wall Street, this warning made the title drop 33% to 14 cents.
The californian group, in open conflict with its former CEO and founder Dov Charney, says that its funds were only 13 billion dollars at the end of june. plus a 6 billion credit line granted by the Capital One bank.
Things are going so bad that the company won’t be able to send on time its trimestrial activity repport to the stock exchange watchdog, SEC, as required by law.
The company which was counting 239 shops in around twenty country around the world, including 135 in the US at the end of march, explains that to survive it needs to proceed to a new financing round and restrure its debt.
« the company doesn’t expect to recieve financial support for now (from creditors) to fulfill the next twelve monthes needs », warns American Apparel. And « even if such transaction ot agreement would be found, the news and current creditars of the company, could clean either the partial or total losses of their investment », developpe the group.
American Apparel avoid bankruptcy for now, thanks to funds injection from Capital One bank and from the new-york investment funds Standard General.
In the begining of july, the group anounced a reduction of costs, including closing of shops, job cuts to face the fall of its sales.
Aside from its financial situation, American Apparel also has to deal with the major conflict it has for more than a year with Dov Charney, invicted last december. He was the object of several sexual arrasment complains. Dov Charney press 20 times charges against the group he founded in 1989 in Los Angeles from Montreal.