In our ongoing American Apparel Is Going out of Business series, we have what feels like the death knell. The Los Angeles Times reports that American Apparel will likely be finally closing its doors within the next 12 months.
Here's the deal, in the last quarter AA's sales fell another 17% and the company is operating at a net loss of $19.4 million. It's now closer than ever to declaring Chapter 11 and even with all the efforts to shift the focus of American Apparel away from those controversial ad campaigns, it seems pretty fucked based on the stories surrounding their breakdown regardless. The company immediately agreed to a new credit line of $90 million with its lenders compared to its previous $50 million and, while I'm no financial advisor, that's a hefty increase and spiking a credit line doesn't exactly feel like a sign of encouragement. It already has $235 million in debt to pay off in the long term and will owe a $13.9 million payment in October, despite only having $6.9 million in cash on hand right now and it also doesn't have the borrowing capacity to get enough overall, according to Fortune.
The changes new CEO Paula Schneider wants to put in place probably won't save the company and their sheer amount of stores means such a large overhaul that it doesn't seem likely to even get off the ground before its doors close for good. All that aside, one thing is for sure, the inevitable warehouse sale is going to be fucking legendary.
