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American Apparel Is Apparently Looking For A New Owner
American Apparel's woes have been well-documented. It dumped founder and CEO Dov Charney after he'd allegedly misused funds and sexually harassed a number of his employees. It filed for bankruptcy in 2015 after amassing more than $300 million in debt. And, most recently, the word was that the company wanted to move its L.A. factory to a state with a lower minimum wage to save on costs.
Now, the company's owners may be cutting their losses by looking for a buyer, reports Reuters. Sources say that the company has hired a bank—Houlihan Lokey—to help it explore a sale. This move comes just six months after American Apparel emerged from Chapter 11 bankruptcy.
Of course, there is some speculation that Charney could be in the mix as a potential bidder/buyer. In January, as the company was going through brankruptcy, Charney teamed up with investors like Hagan Capital and Silver Creek Capital to make a $300 million bid for the company. The bid failed, and Charney turned his attention to a new clothing line.
When asked by WWD on Wednesday if he's interested in buying back his company, Charney said, "I have no idea what the proposition is so I don't know if I'd be interested or not."
He then took a jab at the people who'd dropped him unceremoniously. "They've stripped the company of its assets. They've fired all the creatives with a brutal corporate control battle. They've lost hundreds of workers. It's astonishing," said Charney.
As noted at Rueters, American Apparel isn't the only youth-centric clothing chain that's having a rough time. At least eight teen apparel brands—from Aeropostale to Pacific Sunwear—have filed for bankruptcy this year. Shoppers are turning to the internet more and more, where the competition is much broader. The retailers have also been unable to cope with the fast-paced, ever-evolving world of online shopping. As hypothesized by CNBC, one of the changes in teenage tastes is that, today, kids put more value on an individualistic look; they're no longer tempted by the brand-prestige model that companies like Abercrombie & Fitch have been relying on for years. Also, malls just aren't cool any more. All these things have converged to spell doom for many teen clothing retailers. In May, Aeropostale was de-listed from the New York Stock Exchange after its shares dropped to 15 cents.