The New York Times reports that American Apparel has finally declared bankruptcy. There have been conspiracy theories, protests against the new management, million-dollar lawsuits opened by disgraced founder and CEO Dov Charney (who had a ton of his text messages leaked) and the rumor mill has been swirling around this fate like vultures for a while.
Bankruptcy doesn't mean immediate shutdown, as we've seen before. This filing will allow the company to keep its 130 U.S. stores open along with its factories. There were also no layoffs announced with the filing either. More than anything, this sounds like it really screws over Charney, who was ousted from his post late last year, but still had a stake worth $8.2 million in the company. If my understanding of finance is correct, all that just went *poof* and vanished. But I could be wrong. With American Apparel losing more than $340 million over the past five years and $45 million this year alone, bankruptcy always felt like it was coming. The Times piece says that the company couldn't even afford to bring more than 20% of its fall selection to the stores. That's a fucking dagger.
American Apparel management says that it should be able to turn things around now that it has new financing and been saved from its crippling debt situation but we'll see how that pans out. Usually, the "bankruptcy" label is usually enough to deter people from thinking the brand even exists anymore.