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Threat to 180 jobs as American Apparel's UK arm goes into administration

Published 08/11/2016

American Apparel sai its 13 UK stores are well-stocked and will continue to trade as usual in the lead-up to the peak Christmas trading period
American Apparel sai its 13 UK stores are well-stocked and will continue to trade as usual in the lead-up to the peak Christmas trading period

More than 180 jobs are at risk after American Apparel's UK business plunged into administration.

The US fashion chain's 13 UK stores look set to close after falling foul of the tough trading conditions in Britain and America.

While the group's American arm is in the throes of being sold, its UK and European operations are not part of the deal, according to a dministrator KPMG.

However, it stressed that no redundancies had been made and the stores remain open.

Jim Tucker, joint administrator and restructuring partner at KPMG, said: "The American Apparel group has been experiencing strong retail headwinds, which has culminated in the US parent deciding to stop inventory shipments to the UK.

"The UK business has experienced similar trading difficulties, resulting in the appointment of administrators.

"The 13 UK stores are well-stocked and will continue to trade as usual in the lead-up to the peak Christmas trading period.

"Whilst the UK business is not part of the US sale, a number of the UK stores are in prime high street locations, and we will also aim to sell individual stores following the Christmas trading peak."

The UK stores include sites in Covent Garden, Carnaby Street and Kensington High Street in London, as well stores in Brighton, Bristol and Glasgow.

The announcement comes after American Apparel filed for US bankruptcy protection in October 2015.

The Los Angeles-based firm said last year that it had reached a restructuring deal with 95% of its secured lenders to reduce its debts.

The company flagged up problems with its finances in August 2015, saying it might not have enough cash to keep the firm going as losses widened.

The cult fashion brand makes all of its garment in the US, and trades on its "Made in Downtown LA" reputation.

The business was founded by Canadian Dov Charney in 1989, who dropped out of college and borrowed 10,000 US dollars (£6,600) from his father to start the firm. The business first traded as a public company in 2007.

However, the group later fired Mr Charney over a series of misconduct claims made against him.

American Apparel's chief executive, Paula Schneider, stepped down in September in this year.

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