American Apparel Files For Bankruptcy

American Apparel filed for chapter 11 bankruptcy on Monday, October 5 2015, in order to reorganize the company and still keep lenders invested while setting up a plan to pay back their debt. According to the brand, 95% of its investors are supporting the restructure and are staying on board as lenders. Former CEO and American Apparel founder Dov Charney set the company back when he was fired after a series of lawsuits last December, so it wasn’t completely unexpected for the company to fall into financial distress.

American Apparel Files For Bankruptcy

But the issue dates back further than that. According to The Business of Fashion’s website American Apparel has been in rough waters since 2010, and since then has accrued a debt of $338 million, with $92.9 million coming in the first half of 2015 alone. Despite the troubling figures, there seems to be hope for the company yet. The reconfiguration allegedly reduced the debt to $135 million, according to Vogue, which will also cool the burn of interest payments.

With all of the controversy surrounding the brand, there’s no doubt there will have to be a show-stopping reboot of apparel to re-ensnare the hearts of consumers. There may be a lasting fear that links the debt to a downgraded quality – not saying this is the case, but there’s no way to know until the time comes for a reboot.

Losing a founder can be detrimental to the wellbeing of a retail brand, and we can expect to see some changes, from the design aesthetic to the whole refinancing of the corporation. American Apparel needs to really hit the ground running once they manage to get back on their feet for a new line, because you only have one chance at a first reintroduction.

We’ll be expecting large changes from the brand, but it’s hard to know where the changes are going to come, since the company caters to such a wide client base. From kids and teenagers to adults, their designs are far-reaching, so their rebranding could come from any or all directions. There’s no reason to believe one department will undergo serious neglect, since they have a legacy to uphold. “We are the largest manufacturer of clothing in the United States,” the company states on their website.

With such a responsibility, we can only hope American Apparel will wow us with their rebranding. As of now, it may be their only chance at maintaining its prestigious point of relevance in the apparel industry, so it all comes down to the decisions made, and the company’s ability to maintain a stable financial situation over the next few years and on.

Photo courtesy of jpda.net

Recent Posts

Cute Summer Nail Art to Swoon Over

Summer's here, so you definitely want to get your mani on point. Bright colors, florals, negative space art, polka dots are just a part of the trends you should include on your list. We rounded...

Chic Celeb Hairstyles to Steal for a Summer Wedding

If you've been searching for the perfect do, we're here to help. Get some major hair inspo from celebrities such as Jennifer Lopez, Vanessa Hudgens, Sara Sampaio, Kate Bosworth and more. Margot Robbie [caption id="attachment_102319"...

Celebrity Dresses That Give Us Major Princess Vibes

Feast your eyes on the most princessy red carpet moments served by celebrities. From Cinderella-inspired gowns to out-of-this-world tulle dresses, flip through this article to see the most beautiful fairytale-like ensembles. Tabitha Simmons [caption id="attachment_102222"...

The Best Dressed Guests at The Royal Wedding

Prince Harry and Meghan Markle tied the knot on May 19. They both looked dreamy, Prince Harry in his uniform, while Meghan Markle in two simple-yet-mesmerizing bridal gowns. Clare Waight Keller of Givenchy designed the...

Royal Wedding: Prince Harry & Meghan Markle Tied The Knot

It's official! Prince Harry and Meghan Markle tied the knot on Saturday, May 19. The royal bride and groom exchanged vows in front of 600 people, including royal members, celebrities, and other influential figures. The...