It was announced last week that American Apparel would be filing for chapter 11 bankruptcy in hopes that a refinancing plan could help get its $300 million debt under control. Just a couple days later, the company was approved for a $90 million loan to begin the rebuilding process.
Now, as the retailer reevaluates, it's sharing the plans it has for the future.
According to WWD, the chances of American Apparel exiting bankruptcy are high, as long as the investors continue to support the company.
“We have made an investment in the future of American Apparel, and believe that the company’s management is well-positioned to drive a successful revitalization of the brand. As partners in the restructuring effort, we are committed to helping the company execute its transformation strategy, keeping jobs and operations here in America,” the group of creditors told WWD.
The company will return to court next month, and an attorney working on the case believes the process will go quickly and according to plan.
During the bankruptcy, American Apparel will decide which of its 160 U.S. stores it will keep. The ones that close will have liquidation sales and the leases will be auctioned off.
Dov Charney is still hoping to be involved in the future of the American Apparel, and is said to be possibly searching for a partner to help take control of the company.
Although Charney denies any misconduct during his time as CEO, the retailer shared that it has already paid $5.7 million to people who filed claims against him. It was revealed earlier that he would lose his shares in the company valued at over $8 million during the refinancing.
Overall, the retailer is expected to survive and move forward after bankruptcy.