Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

American Apparel Files for Chapter 11 Bankruptcy Protection

The US clothing retailer ran into trouble just months after shedding $200 million in debt and emerging from Chapter 11 in February.
An American Apparel billboard | Source: Flickr/Emily Burnett
By
  • Bloomberg

LOS ANGELES, United States — American Apparel Inc. filed for bankruptcy, less than a year after ending its first stint under court protection.

Gildan Activewear Inc. agreed to buy its intellectual property rights for about $66 million following the filing, the Canadian company said in a statement . Gildan said American Apparel made its filing Monday.

The US clothing retailer ran into trouble just months after shedding $200 million in debt and emerging from Chapter 11 in February. Chief executive officer Paula Schneider, who took charge after controversial founder Dov Charney was forced out, resigned in September.

Reports of a possible sale and a return to bankruptcy surfaced in October.

ADVERTISEMENT

American Apparel emerged from its earlier bankruptcy after former bondholders — led by Monarch Alternative Capital — took over. But a plan to return to the company’s roots and focus on basic items like T-shirts and skirts wasn’t enough to improve results.

As part of its previous bankruptcy, the company closed at least 13 unprofitable locations. The goal was to operate 212 stores, which in 2014 had produced $331 million in sales, or 54 percent of the company’s total.

As malls lose foot traffic and more Americans shop online, many US retailers have struggled of late, with clothing companies hit particularly hard. Aeropostale Inc., Quiksilver Inc. and Pacific Sunwear of California Inc. filed bankruptcy in the last two years.

Charney was fired in 2014 over allegations of misconduct. He fought unsuccessfully to regain control of the business he started as a college student. American Apparel’s results only got worse under Schneider, and it filed for bankruptcy in October 2015.

By Steven Church, Lauren Coleman-Lochner and Matt Townsend; editors: Andrew Dunn, Thomas Mulier and Nick Turner.

Related Articles:
Dov Charney's Next Act
Report: American Apparel Preparing Second Bankruptcy Filing
American Apparel Hires Investment Bank to Explore Sale, Say Sources

In This Article

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from News & Analysis
Fashion News, Analysis and Business Intelligence from the leading digital authority on the global fashion industry.
view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.