Just when we thought business for American Apparel was going to get better without its leading founder, Dov Charney, things are beginning to look worse than before. With sales consistently sinking, so is the brand.
The company issued a press release on July 6th detailing cost cut plans and store closings – in addition to the 135 workers that were laid off in September. American Apparel plans to reduce expenses by $30 million over the next 18 months.
“Even if American Apparel increases revenue and cuts costs, there can be no guarantee that the company will have sufficient financing commitments to meet funding requirements for the next 12 months without raising additional capital, and there can be no guarantee that it will be able to raise such additional capital.”
Although certain stores will be closing, they do plan to add others in more profitable locations. The current CEO, Paula Schneider, is very adamant and committed to turning the company around.
“We are committed to turning this company around. Today’s announcements are necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability. Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years. Our customers, employees, and local communities around the world believe that American Apparel is an iconic brand that deserves to succeed. My job is to make that a reality.”