Belfast Telegraph

Troubled fashion firm American Apparel to restructure

By Roger Baird

US fashion chain American Apparel has filed for US bankruptcy protection.

The Los Angeles-based firm, which runs 260 shops and concessions in 19 countries, said in a statement it had reached a restructuring deal with 95% of its secured lenders to reduce its debts.

It said the restructuring will take around six months, and its international stores will not be affected. It has 18 stores and concessions in the UK, including locations in London, Leeds and Glasgow, but there are none in Northern Ireland.

American Apparel chief executive Paula Schneider said: "This restructuring will enable American Apparel to become a stronger, more vibrant company."

She added that the move would allow the firm to "refocus our business efforts on the execution of our turnaround strategy".

It said that as a result of the deal, lenders will write off about $200m (£131m) of bonds in exchange for equity in the company, reducing its $300m (£198m) debt to no more than $135m (£89m) and cutting annual interest payments by $20m (£13m).

In August, the company flagged up problems with its finances, saying it might not have enough cash to keep the firm going for the next 12 months as losses widened.

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

Belfast Telegraph