American Apparel to Close 9 Stores Before its Bankruptcy Auction
Bankrupt retailer American Apparel is rushing to get its affairs in order before its bankruptcy auction in January. Most recently, it moved to close nine storefronts. American Apparel said in a court filing Wednesday it intends to shut down the nine poorly performing stores by the end of the month, and before a planned auction of more than 90 of the company’s remaining stores, The Street reports. The debtor said it will be able to garner around $600,000 in proceeds from closing the unprofitable stores.
Total Retail's Take: A solution can't come soon enough for American Apparel. The struggling retailer has filed for bankruptcy twice within the last 13 months, and is dependent upon finding a buyer in order to remain in business. American Apparel's troubles started with a rocky relationship with the company's founder, Dov Charney, and his lewd actions. More problems arose with the intense competitive pressures facing U.S. teen retailers, as well as the near constant turnover in the company's upper management. American Apparel is trying to shed some debt — namely these nine stores — prior to its auction in January, in the hopes it will become more attractive to a potential buyer.