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There are reports the American Apparel clothing chain is going through some very difficult times and is on the verge of filing for bankruptcy.
The brand’s debt continues to grow. It totalled $120.3 million as of June 30 and sales were down by 16%.
Faced with this grim reality, the brand admitted it may not be able to continue operating into next year. It says it does not have enough cash to stay afloat.
According to some analysts, founder and current CEO of American Apparel, Dov Charney, does not have what it takes to run the business.
The company has been the subject of several lawsuits which have greatly damaged its image.
In addition to being accused of unfair dismissal and sexual harassment, the brand also had to pay $5 million to Woody Allen for using his image without permission.
Shares of American Apparel dropped 26% on Tuesday (August 17) in New York.
Source: fashioism.ca
