{"id":19304,"date":"2011-04-04T09:56:05","date_gmt":"2011-04-04T17:56:05","guid":{"rendered":"http:\/\/198.46.88.49\/?p=19304"},"modified":"2011-04-04T09:59:49","modified_gmt":"2011-04-04T17:59:49","slug":"the-wider-repercussions-of-an-american-apparel-bankruptcy","status":"publish","type":"post","link":"http:\/\/198.46.88.49\/style\/fashion\/the-wider-repercussions-of-an-american-apparel-bankruptcy","title":{"rendered":"The Wider Repercussions of an American Apparel Bankruptcy"},"content":{"rendered":"
American Apparel’s losses continue to grow, and sales continue to decline. Founder and CEO Dov Charney is being sued for sexual harassment by several former employees. Lion Capital, the financial backer that has continued to support American Apparel financially through years of losses and declines, left the board of the company.<\/p>\n
While the LA Times reports<\/a> Charney as saying the possibility of the company filing for bankruptcy protection were “not even a 1-in-1,000 chance,” many observers are wondering how much more the company can take before being forced to do so. Charney recently put his own money into the company, purchasing 6 million shares. There are 79 million shares of American Apparel available, and the purchase brought Charney’s portion up from 41 million to 44 million. The remaining 3 million won’t be released until the share price hits $3.50. {Styleite<\/a>}<\/p>\n American Apparel stock is currently trading at $0.90 per share.<\/p>\n American Express has threatened to de-list American Apparel numerous times, so one option might be for Charney to take the company private, and that choice may be made for him. Even if the company is removed from public exchanges, that may not be enough to prevent the company from having to go into bankruptcy. Though the $250 million sexual harassment suit filed by Irene Morales looks like it may end up being resolved through binding arbitration, the mounting allegations will cost money to defend. Throw in the rising cost of cotton and natural fiber textiles with years of declining sales, and it’s difficult to see a way for the company to continue as a going concern.<\/p>\n