About a year ago, fashion brand American Apparel filed for bankruptcy due to internal issues and financial struggles. Even after undergoing business strategy initiatives and new executive staff, the Los Angeles-based retailer is only doomed to repeat its past as according to a leading US daily, American Apparel Inc. seems to be preparing for its second bankruptcy filing.
The exact date for the bankruptcy filing was not disclosed, however it could come in the coming weeks. As reported by the publication, the bankruptcy filing has not yet been confirmed by the retailer and had failed to comment yet.
Exiting bankruptcy earlier this year in February, the elevated basics apparel brand emerged as a private company through its new restructured organization plan and was able to officially exit Chapter 11 bankruptcy.
As part of a turnaround plan, the company converted US $ 230 million of bonds into equity in the company. Paula Schneider, who has now left her position as Chief Executive Officer at American Apparel, led the company out of bankruptcy originally emerging towards a new goal and at the time commented, “With the enormous debt burden removed, we can now turn our full attention to our strategic turnaround, which will benefit our customers, vendors, and employees.”
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The company also hired investment bank Houlihan Lokey earlier this year which showed that the company may be seeking buyers, where rumours of companies such as Authentic Brands Group LLC and Iconix Brand Group Inc. pose as interested in buying American Apparel. “Negotiations could lead to American Apparel filing for bankruptcy for the second time in as many years,” mentioned a report, making this to be one of the reasons that the controversial brand is headed towards its second bankruptcy.
The retailer has undergone quite a few ups and downs this past year. If the brand is headed towards a second bankruptcy filing, it seems that the end of the ‘Made in USA’ retailer may be near. With inconsistent business plans, frequent executive head changes, and financial struggles, the future of this company is hazy.
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