The Business of Fashion
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LOS ANGELES, United States — American Apparel Inc. founder Dov Charney is working with a small investment bank on a potential bid to buy the clothing retailer out of bankruptcy.
Charney, who has been trying to regain control of American Apparel since being ousted last year, has engaged Cardinal Advisors LLC to evaluate options, according to a statement e- mailed to Bloomberg on Friday.
Charney was fired last December from his dual roles of CEO and chairman following allegations of misconduct. He has since pushed for his return without success. The retailer was struggling with losses and debt under his leadership, and its results only worsened after his dismissal. That ultimately led the chain to file for bankruptcy protection in October.
“Charney is confident that new and existing investors, working with him and his team of industry leaders, would be able to realize significant long-term value for American Apparel’s stakeholders,” according to the statement.
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In a short interview, the former CEO said he’s been talking to several potential financial partners, but declined to be more specific.
Cardinal Advisors, which was started in 2014, confirmed that it's working with Charney. Co-founder David Felman is a veteran of investment bank Moelis & Co.
Final Stages
American Apparel is in the final stages of its bankruptcy case. It’s scheduled to seek approval of its reorganization plan on Jan. 20 after evaluating any bids it may get. When American Apparel filed for court protection in October, the company said it had support from 95 percent of its secured lenders, an overwhelming majority that typically makes it easier to win approval of a reorganization plan.
Charney needs a financial backer because he had most of his net worth tied up in American Apparel stock, which was wiped out when the company filed for bankruptcy. Last month, he claimed financial hardship in a lawsuit, saying he had to represent himself because he couldn’t afford to pay for a lawyer.
By Matt Townsend, Steven Church; editors: Nick Turner, Kevin Orland.
