Dive Brief:
-
Los Angeles-based, made in the USA retailer American Apparel Inc. said Monday that its Q1 net losses widened to $26.4 million and overall sales fell 9% to 124.3 million. Q1 U.S. sales fell 12% to $37.3 million, and U.S. wholesale revenue grew to $49 million.
-
In addition to legal troubles over its ouster of founder and ex-CEO Dov Charney and discontent from workers, the company said it’s in a disagreement with a landlord in Los Angeles.
-
The company said it will sell up to $10 million more shares of common stock to raise money.
Dive Insight:
This is a moment when American Apparel is dealing with all manner of crises, from plummeting sales to lawsuits and even a investigation from the Securities and Exchange Commission, and now a dispute with a local landlord.
Ousted CEO Dov Charney filed a lawsuit last week, one of the many the company faces over his treatment last year, when the board wrested control of the company from its founder.
New CEO Paula Schneider has largely brushed off the company’s falling fortunes, saying it has to clear out inventory before the turnaround that’s begun can take hold and that work stoppages are over for now.
That aspect of American Apparel, that it sells American-made apparel made by U.S.-based workers who are paid and treated far better than those toiling away in places like Bangladesh, is an important part of its brand. It’s not really clear so far how dedicated the new regime is to that.
