It's official. American Apparel has announced plans to file for bankruptcy.
The news came earlier this week, following a hard slog for the company. American Apparel has had a tumultuous year in the headlines, with continued reports of mounting debt and controversy surrounding former CEO, Dov Charney.
According to reports, the restructuring process will be completed over the next six months. Approximately $90 million in debtor-in-possession financing will be provided, with $70 million going to the company’s restructure. The move is expected to slash the company’s debt dramatically, from $300 million to around $135 million. It will also trim annual interest by about $20 million.
“This restructuring will enable American Apparel to become a stronger, more vibrant company,” CEO Paula Schneider said in a statement.
“By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy as we look to create new and relevant products, launch new design and merchandising initiatives, invest in new stores, grow our e-commerce business and create captivating new marketing campaigns that will help drive our business forward.”
And so the turnaround efforts continue. We've got our fingers crossed.