American Apparel To Cut Jobs And Close Stores

The pressure continues at struggling teen-and-young adult fashion company American Apparel, with the firm announcing its latest restructuring — including store closures and the “streamlining its work force.”

Released today, American Apparel’s “strategic turnaround plan” involves a cost-cutting goal of approximately $30 million and new hires Christine Olcu as GM of global retail and Brad Gebhard as president of wholesale “to help execute global retail and wholesale turnaround strategies.”

Even with its ramped up efforts, the firm has expressed uncertainty about its ability to keep the brand’s stores open for the next year.

“Even if American Apparel increases revenue and cuts costs, there can be no guarantee that the company will have sufficient financing commitments to meet funding requirements for the next twelve months without raising additional capital, and there can be no guarantee that it will be able to raise such additional capital,” the company’s statement read.

The firm will close underperforming stores and add new ones in more profitable territories, as well as  launch redesigned fall merchandise, according to the release. The number of store closures and layoffs have not been disclosed but American Apparel has 10,000 employees and 239 retail stores in 10 countries.

The company said its initiatives are aimed at “stabilizing the company financially by maximizing retail-store performance and revamping the company’s product merchandise assortment.”

“We are committed to turning this company around. 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,” said newly appointed CEO Paula Schneider in a statement. “Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years.”

The company is still enmeshed in a legal saga with ousted founder and ex-CEO Dov Charney, who has initiated 20 lawsuits and administrative actions against American Apparel.

“The company believes these cases are meritless and intends to vigorously defend against such actions and, where possible, pursue remedies against Mr. Charney for his actions,” the firm said.

More From Our Brands

Access exclusive content