The writing has been on the wall for a while, and it seems the inevitable has finally come to pass: troubled apparel retailer American Apparel this morning filed for bankruptcy in a Delaware court. Yes, again.
Reuters reports that the retailer once again filed for chapter 11 bankruptcy protection and is on the hunt for a buyer.
Canadian company Gildan Activewear will be buying “certain assets” and “intellectual property rights” from American Apparel for about $66 million, Reuters adds. That includes manufacturing, distribution, and warehouse operations in and around Los Angeles, but does not include any retail stores. Currently, there are no known plans to close store locations and the company chairman wrote in a letter to employees that this “will have no noticeable effect on day-to-day operations in the United States,” according to Reuters.
It’s not you having déjà vu; this really has happened before. American Apparel declared bankruptcy for the first time just over a year ago, in October of 2015.
And while bankruptcy and restructuring can be a path to recovery for many companies, it has been anything but smooth for American Apparel. The company ousted its controversial CEO Dov Charney in 2014, amidst a cloud of sexual harassment allegations and generally being a jerk. He tried to buy the company back in January, after it filed for bankruptcy.
The company board, however, rejected that offer, and the judge in charge of the proceedings chose American Apparel’s own restructuring plan as the one to follow.
That plan, however, has proven insufficient. In August, the company was considering moving manufacturing out of California to save money; by September, the new CEO was also out the door.
by Kate Cox via Consumerist
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