So we’re all aware of American Apparel, correct? The wonderful clothing chain that features softcore porn in its advertising (but not the kind that features those cheap Instagram starlets) and even has its mannequins baring all (giving Kim Cattrall a reason to live). They’re also known for their pricey clothing and some judgmental teens working behind the counter, as documented by comedian George Wallace in this tweet.
Well if you weren’t a fan, the news broke today that American Apparel is filing for bankruptcy and Dov Charney is out millions. The company filed for protections on Monday, according to the New York Times, apparently “crippled by huge debts”:
No layoffs were announced in the filing, which still requires approval by the bankruptcy court. The retailer’s overseas operations are unaffected by the restructuring, which American Apparel expects to complete within six months.
Still, the bankruptcy would wipe out American Apparel’s current shareholders, including Mr. Charney, whose stake in the retailer, which he founded in 1989, was worth about $8.2 million as of Friday…
American Apparel’s own bankruptcy had become inevitable, as the retailer posted quarter after quarter of steep losses. Its sales fell 17 percent in the second quarter compared with last year, a slump attributed to a dearth of new styles. American Apparel’s losses over the last five years have topped $340 million, and it has lost $45 million more this year.
This likely covers it
With the news breaking, many people went toward the obvious concerns when a store goes on the chopping block and needs to shed some debt: cheap products flying from the shelves. I doubt they’ll go for incredibly cheap, but people are still dreaming:
But other folks decided to dance around the bonfire and celebrate the remains of American Apparel’s business model, including their advertising and pricing strategy, with comedy. Folks were clearly not in the mood to be nice and didn’t mind piling on Charney’s already terrible, horrible, no good, bad day.
I think the worst part for American Apparel is that they were mentioned in connection to Radioshack in the same New York Times article. I can’t think of anything worse, not even losing $8 million or owing hundreds of millions to creditors. Radioshack was terrible.
(Via New York Times)