American Apparel has been in trouble for a while but things seem to be looking particularly bleak now. The American-made brand announced that it may soon go out of business. For the second quarter of 2015, there was a 17.2% decrease in sales and a $32.6 million decrease in inventory (22.1%).
Shares have fallen 87% and American Apparel is saying that it looks like it may have to consider shutting down altogether. “We believe that we may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.” A $13.9 million interest payment is due on October 15 – as of August 11, American Apparel had $11.2 million in cash. That’s not enough to pay the interest, which is just a fraction of its $210.6 million debt.
We hate to see an American business crumble but things aren’t looking good for American Apparel. We will definitely be watching this space carefully.
[via TIME, WWD, Businesswire]
