October 5, 2015
American Apparel is bankrupt.
The Los Angeles-based fashion retailer filed for Chapter 11 bankruptcy protection, reaching agreements with 95 percent of its lenders to cut down debt and interest owed. This would eliminate about $200 million in bonds that would be replaced by shares of a reorganized American Apparel.
In its most recent quarter, American Apparel reported a 17-percent drop in revenue. Net losses have totaled $384 million in the last 5.5 years. The measure will allow the company to also now close underperforming stores.