American Apparel Set To File for Bankruptcy?

This seems like the classic case of a company expanding too quick too fast. Plus having to give Woody Allen 5 million dollars did not help the situation either.
via Huff Post

NEW YORK — Troubled clothing chain American Apparel Inc. said Tuesday it might not have enough liquidity to sustain itself over the next year.

The news sent shares down 21 percent to a 52-week low.

The company also reported Tuesday a preliminary second-quarter loss. It expressed doubt about its ability to continue as a “going concern,” standard language foreshadowing a possible bankruptcy.

American Apparel also said it might fall out of compliance with a credit agreement by Sept. 30. It is working with a lender to amend the agreement, but cautioned that without a reprieve, there may be a damaging financial chain reaction that could force the company to pay both credit lines immediately.

Known as much for its racy ads and outre behavior of CEO Dov Charney as its inexpensive leggings and T-shirts, American Apparel has expanded rapidly since going public in 2007 and operates about 260 stores in 19 countries.

FULL STORY HERE…

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