Pin It
American Apparel campaign
American Apparel campaign

Is the end of American Apparel nigh?

$210.6 million in debt, the purveyors of racy ads and hipster basics have admitted that they could be going out of business soon

American Apparel’s days may be numbered. According to a new financial report, sales have fallen by 17.2 per cent. Apparently the fashion retailer has lost 87 per cent of its stock value this year and has amassed a debt of $210.6 million. The interest payment on this debt (a sum of $13.9 million) is due in October and, as the company only has $6.9 million in cash left in the bank and no remaining borrowing power, it’s likely that it won’t be able to make this payment.

Yesterday evening the brand released a statement saying, “...we may not have sufficient liquidity necessary to sustain operations for the next 12 months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.” In essence, this means that the company is in a sticky financial situation – one which it might not recover from. 

Recently AA has in the press for its attempts to distance itself from the sexually provocative campaigns that it has become synonymous with under Dov Charney’s leadership of the company. Under new CEO Paula Schneider however, the brand has promised to replace crotch shots with social commentary and a focus on the brand’s Made in the USA, sweatshop free credibility. But whether we’ll see many of these campaigns, remains to be seen. 

However it’s not over yet. The stark honesty of the brand’s statement has led many people to believe it’s trying to attract investment. Maybe we’ll see those social conscious campaigns yet.