Reuters reported this week that financially struggling clothing maker American Apparel was in talks with a restructuring firm in an effort that could recharge the hipster brand.
Sources told Reuters that American Apparel chief Dov Charney was in talks with the corporate-turnaround specialist but they would not name the firm in question until the deal was a sure thing.
Bank of American reportedly pressured American Apparel into taking on the turnaround specialist.
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Reuters reports that bankruptcy appears to be unlikely for the Los Angeles-based clothier, which has about 280 retail stores worldwide. Grocery store magnate Ron Burkle is said to have taken a six percent stake in the company earlier this summer.
According to the news service:
American Apparel, known for its "Made in USA" clothing, socially progressive stances and racy advertising, has long been criticized for lax financial controls and a lack of strong senior management. The outspoken Charney is seen as a brilliant creative mind, but who is struggling as he juggles the myriad problems befalling the company.
People close to the matter said American Apparel still had plenty of room to maneuver to fix its fiscal woes ...
As we've been noting, American Apparel has been sued by shareholders, warned by the New York Stock Exchange that it could have its listing canceled, and weighed down with $120 million in debt.