Dive Brief:

• American Apparel Wednesday filed a report with the Securities and Exchange Commission indicating that it is “unable to file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2015 (the "Q2 2015 Form 10-Q") within the prescribed time period without unreasonable effort or expense …” 

• Q2 sales fell 17% and revenue was down 14% in the first half of the year to $250 million. Net losses more than doubled to $45.8 million from $21.7 million year over year.

• The company is facing a bond payment of $15.4 million in the fall, owes the government some $34 million, and legal bills of $3.6 million over its tussles with founder and ousted CEO Dov Charney aren’t helping.

Dive Insight:

American Apparel says it’s negotiating with Capital One regarding credit terms in an effort to right its ship, but things are looking quite dire and beyond any simple financial maneuvers. Esquire magazine speculates that Charney himself could be a potential buyer if the apparel retailer goes under.

The company’s stock dropped more than 35% to 10 cents per share Wednesday, bringing the price down some 90% this year, so its warning to its investors is likely no surprise to them. 

But even if the retailer is able to come from the brink, it appears to have little room—in terms of time or finances—to do the kind of critical work that is currently being attempted by several other teen apparel companies. Abercrombie & Fitch, Aeropostale, and American Eagle Outfitters, for example, are attempting to devise a fresher merchandise mix that might appeal to a picky, budget-minded customer with spending priorities more likely to involve tech gadgets or entertainment like streaming services.