American Apparel Is Headed For Collapse

American Apparel Is Headed For CollapseKristin Cavallari shops at American Apparel in Hollywood, CA (Photo Agency)American Apparel Is Headed For Collapse American Apparel
You may or may not have heard the news, but to say that American Apparel isn't doing so well would be an understatement. Amid falling stock prices, rising debt and talk of dubious accounting practices, the company has been subpoenaed by the Securities and Exchange Commission (SEC) for changing financial auditors. Bankruptcy and collapse are looming in the background!

A series of bad business decisions have brought the retailer, beloved for its hipster basics and racy ad campaigns, to this point. Essentially, American Apparel expanded too much, too quickly and somehow expected lenders to always be there for them. Currently, the company's stock is valued at 81 cents, a 67% drop this year and over 90% since 2007. The company has over $120 million in debt and is expecting a loss of $7 million in this quarter. AA is a public company and the SEC has threatened to de-list it.

In past years there have been illegal worker scandals, sex abuse reports and alleged unlawful hiring practices, however none of those have threatened to bring down the company. CEO and 45 percent share holder Dov Charney has said he can turn the company around in 6 to 12 months, but whether that's possible with all the chaos surrounding the company has yet to be seen. What's for sure is that something has to happen soon!

Source: WWD

Check out pictures of American Apparel here:
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  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
  • American Apparel Receives Federal Subpoena Amid Accounting Inquiry
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