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What are the retailers plans after bankruptcy?
Shortly after filing for Chapter 11 protection early last week, American Apparel has started planning for life after bankruptcy, amid its on-going financial struggles. In the hopes to get it’s $300 million debt under control, the American Apparel brand, which was once valued at nearly $1 billion in 2007, has been approved a $90 million loan as part of a refinancing plan.
Although chances of exiting bankruptcy are said to be high for the brand, according to WWD, the on-going battle with founder Dov Charney, who was fired as CEO last year and remains listed as one of the creditors, is at risk. Furthermore, the ex-CEO was not present at the creditors meeting, and the new plan could see ownership handed to the bondholders. Despite this, the brand is expected to return a profit by 2018, which is something they haven’t been able to do since 2009, thus meaning American Apparel fans can soon rejoice, as hope is still brewing.
The company will return to court next month, with processes expected to run smoothly and quickly. Stay posted for any further details regarding American Apparel and it’s survival through bankruptcy. For now, keep an eye out for liquidation sales as the company looks to decide in the coming weeks which of its 160 US stores it will keep, with the rest shutting down and are due to have its lease’s auctioned off.