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American Apparel May Go Bankrupt Within the Year

Photo: American Apparel

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American Apparel just filed its latest quarterly report, and the future does not look bright for the struggling retailer. Sales are down 17% to $134 million, its stock is currently trading at just 14 cents per share, and the company is fighting to come up with enough cash to keep its substantial debts at bay. According to the LA Times, analysts predict that bankruptcy could be just around the corner for American Apparel. "You are trying to save the Titanic when the bow is already 10 feet underwater," analyst Craig Johnson told the LA Times. "It's not impossible, but it's a very tall order to do."

American Apparel itself has spelled out the dire situation in its filed report: "Based upon the trends occurring in the Company's operations since June 30, 2015 and through the date of this Quarterly Report on Form 10-Q ("Report"), together with the Company's current expectations and projections for the next four fiscal quarters, the Company believes that it may not have sufficient liquidity necessary to sustain operations for the next twelve months," the document reads. "These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern."