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American Apparel Might File for Bankruptcy Again

Brand licensors, Authentic Brands Group LLC and Iconix Brand Group Inc, are among several companies that have expressed interest in acquiring American Apparel, the U.S. teen clothing retailer known for its sexually charged advertising, people familiar with the matter said. Negotiations could lead to American Apparel filing for bankruptcy for the second time in as many years.

Another round of bankruptcy proceedings would allow the buyer of American Apparel to leave behind liabilities of tens of millions of dollars, including leases for more than 200 stores, the people said this week. There is no certainty that the early-stage talks will result in a sale, or that any deal will be contingent upon a bankruptcy filing, the people cautioned. They asked not to be identified because the matter is confidential.

A spokeswoman for American Apparel declined to comment. Spokespeople for Iconix and Authentic Brands did not immediately respond to requests for comment.

Authentic Brands was part of a consortium of mall operators and liquidators that won a bankruptcy auction for U.S. teen retailer Aeropostale Inc this summer. Iconix's brands include juniors and girls line Candie's and cartoon strip characters Peanuts. "I'm saddened to hear the news," said former American Apparel Chief Executive, Dov Charney, who launched a failed bid to buy back the company during its bankruptcy. "I think it could be devastating for the Los Angeles community."

American Apparel would consider moving its factories outside Los Angeles, whose labor costs are higher than many other parts of the country, but it would not make a deal with a licensor to have its products being made outside the United States, one of the people said.

American Apparel's U.S. manufacturing base is central to its "Made in the U.S.A." brand.Charney said a deal with a licensor could result in store and plant closures, leaving thousands unemployed. The company had more than 4,600 employees when it filed for bankruptcy filing in October 2015.American Apparel hired investment bank Houlihan Lokey Inc to explore a sale this summer, Reuters reported in August.

American Apparel emerged from a four-month-long bankruptcy in February that made creditors, including Monarch Alternative Capital LP, the new owners of the privately held company.

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Kirjoitettu Friday 21.10.2016

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