Dive Brief:

• American Apparel Monday warned that it’s in need of capital and is launching a cost-cutting plan that includes closing stores and laying off workers.

• The plan is to save some $30 million over the next 18 months, and the worry is that the retailer may not have the capital to cover its funding requirements in the coming year unless it can raise money. In May the retailer announced a $10 million at-the-market offering program.

• But CEO Paula Schneider also said that for the first time the retailer is planning a fall line and that, in addition to closing underperforming stores, it would open new stores in key markets.

Dive Insight:

No one expected any turnaround by American Apparel to be easy, but it has been especially difficult for the retailer to shakes its troubles. The messy ouster of its founder and now ex-CEO, Dov Charney, isn’t quite in the past, as the two sides continue to lob lawsuits at one another.

The retailer is handicapped by its cash-poor situation, as well. The question now is whether American Apparel can truly turn the page. In addition to finally resolving its legal and financial woes — both seem elusive — it would help if the plans the company says it has for its first-ever fall line really do appeal to the millennials who have become increasingly disinterested in what most apparel stores are selling.

But, in the effort to put behind some of its more controversial marketing, not to mention any shenanigans happening in the front office, the retailer must also take care not to stray to far from the edge. Playing it safe could just put it in line with the other As — Aeropostale, Abercrombie & Fitch, and American Eagle — which are also working hard to figure out the way to young people’s hearts and wallets.