American Apparel says it might not have enough liquidity to be sustainable in the next year
By APTuesday, August 17, 2010
American Apparel warns about its future
NEW YORK — American Apparel says it might not have enough liquidity to sustain itself over the next year.
The news sent shares down 19 percent to a 52-week low.
The troubled clothing chain also reported Tuesday a preliminary second-quarter loss. It expressed doubt about its ability to continue as a “going concern,” standard language foreshadowing a possible bankruptcy.
American Apparel also says it might fall out of compliance with a credit agreement. It is working with a lender to amend the agreement.
Known as much for its racy ads and outre behavior of CEO Dov Charney as its inexpensive leggings and T-shirts, American Apparel has expanded rapidly since going public in 2007 and operates about 260 stores in 19 countries.
