Troubled teen apparel retailer American Apparel Inc filed for bankruptcy protection on Monday and said it had reached a restructuring support agreement with 95% of its secured lenders.
“This restructuring will enable American Apparel to become a stronger, more vibrant company,” Chief Executive Paula Schneider said in a statement.
The company listed assets and liabilities of between $100 million and $500 million in its bankruptcy filing.
“By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy,” Schneider added.
Teen apparel retailers are struggling as customers switch to fast-fashion brands such as H&M , Forever 21 and Inditex’s Zara and online retailers such as Amazon.com Inc that offer deep discounts.
Companies such as Wet Seal, Cache Inc , Deb Shops, Delia*s and Body Central Corp have filed for bankruptcy in the last year.
American Apparel, founded in 1989 by Dov Charney whose ‘Made in America’ mantra found huge favor among young shoppers, has been in disarray after it fired him in December for alleged misconduct.
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Charney has since filed several lawsuits against the company, alleging defamation, representation in false light and claims for securities fraud.
Reuters