American Apparel, the one-time arbiter of edgy made-in-America
cool, filed for bankruptcy protection early Monday, its business
crippled by huge debts, a precipitous fall in sales, employee
strife and a drawn-out legal battle with the retailer’s ousted
founder, Dov Charney.
The Chapter 11 petition, approved by the board, was filed in
federal bankruptcy court in Delaware. The filing followed a deal
struck with most of American Apparel’s secured lenders to reduce
the retailer’s debt through a process known as a debt-for-equity
conversion, where bondholders swap their debt for shares in the
The deal, which also includes extra financing from the
participating bondholders, would enable American Apparel to keep
its manufacturing operations in Los Angeles and its 130 stores in
the United States open, the company said.
I like their T-shirts (DF shirts have been printed on AA tees for many years), and I like that their products are proudly made in America, so I’m really hoping they recover from this. But I hope they recover with their brand intact.