American Apparel to shut stores
The Los Angeles-based clothing chain, which is embroiled in a legal battle with its former founder and CEO, Dov Charney, said it planned to slash $US30 million ($A40 million) in spending over the next 18 months.
To get there, the company said in a statement on Monday that it would close “under-performing” retail locations, resulting in job losses, without providing details on numbers or locations.
The company, which makes its own clothing in downtown Los Angeles, had 239 stores in about 20 countries, including 135 in the United States, at the end of March.
Sales have been declining since 2010, leading to a series of steep losses.
American Apparel said it would launch a redesigned autumn line of clothing for both women and men.
“We are committed to turning this company around,” said Paula Schneider, the recently appointed CEO, in the statement.
“Today’s announcements are necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability.”
But the company warned that even if it boosts revenue and cuts costs, it still would need to raise additional capital to meet funding requirements for the next 12 months.
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