American Apparel Files Chapter 11 Bankruptcy

chapter 11 bankruptcyMade-in-America clothing retailer American Apparel filed Chapter 11 bankruptcy this week in the wake of poor sales and pending litigation. According to USA Today, the retailer has reached debt restructuring agreements with the majority of its secured debt creditors. The company, who has 8,500 employees who work in six factories and 230 stores worldwide, told the court it plans to close unprofitable stores as part of its restructuring plan. At the time of filing chapter 11 bankruptcy, the 26-year-old retailer had $397.6 million in debt and just $199.3 million in assets. With new CEO Paula Schneider at the helm, American Apparel hopes to rebound quickly. Schneider says, “By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy as we look to create new and relevant products, launch new design and merchandising initiatives, invest in new stores, grow our e-commerce business, and create captivating new marketing campaigns that will help drive our business forward.”

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Image Source: William Murphy