American Apparel Inc., Los Angeles, recently announced that it does not expect to have sufficient funds to sustain the company’s retail division for the next 12 months, warning it may not be able raise additional capital, according to Reuters.
The company said it could breach covenants related to a credit facility.
American Apparel has been working with lender Capital One Business Credit Corp. to waive the non-compliance, but failure to obtain a waiver could have an “adverse effect” on its financial position, according to the company.
In July, the retailer launched a restructuring plan in an effort to decrease costs by cutting jobs and closing stores. As far apparel, CEO Paula Schneider refocused on basics, as well as discounting and discontinuing struggling items.
For more information, visit americanapparel.com. — L.V.
