American Apparel Possibly Saved From Bankruptcy, Debuts 'In Bed With The Boss' Ad (PHOTO)
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Deep v-clad hipsters everywhere can breathe a sigh of relief: American Apparel might be saved from bankruptcy. WWD reports that American Apparel's lender Lion Capital has given the brand some breathing room, but will also be bringing in new senior executives.
Founder and partner of Lion Lyndon Lea told WWD, "Lion Capital has enormous admiration for both American Apparel and its founder, Dov Charney. We are working together with Dov to realign the capital structure of American Apparel to support a number of key initiatives within the business, including the hiring of several new senior executives."
Charney told the fashion newspaper, "Retail is hard right now. I'm not alone in this. You have to work for every dollar, you have to work on the merchandise, make sure the product mix is perfect and the allocation is right."
The Cut reports that the new arrangement boded well for American Apparel on Friday, but there's definitely more to be done:
American Apparel's stock rose 16.3 percent to $1.43 on Friday thanks to the deal. The stock peaked at $15 in December of 2007 and plummeted to 66 cents this year. Under the terms of the new agreement with Lion, American Apparel is not completely out of the woods. They still have to do things to prove they are a functional retail establishment worthy of this aid to its survival, like, oh, sell merchandise. The company must turn a pre-tax profit of $20 million over the 12 months ending January 31, and by September 2013 must rake in $80 million.
That just leaves a Department of Justice investigation, an accounting scandal, an SEC investigation, avoiding delisting, late quarterly filings, plummeting sales, and overall un-profitability on the to-do list!
Perhaps new advertisements would help Dov and co. get it together. On Monday, The Cut received an image from American Apparel's new campaign called "In Bed with the Boss," showing two of the company's creative directors chilling with laptops and a puppy in bed with Dov. Definitely a far cry from the label's previously not-so-subtle pics.
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First Posted: 10/05/10 12:18 PM ET Updated: 05/25/11 06:55 PM ET