American Apparel chief denies reports that firm seeks a buyer
American Apparel Inc. Chief Executive Dov Charney is shooting down reports that the Los Angeles clothing company is looking for a buyer.
“I’m not surprised that there would be interest in the company, and at times, there has been, but it’s not accurate,” Charney said. “We’re not looking, and it’s not going to happen.”
On Wednesday, a report on private equity online forum peHUB said American Apparel had hired advisor Rothschild to help it explore a potential sale, citing three sources familiar with the matter. The clothing company has been contending with a falling stock price, sales declines and losses, and last week warned that it might be forced to file for bankruptcy protection if business did not improve.
The peHUB report said it was unlikely that Charney, who is embroiled in two sexual harassment lawsuits filed last month by former employees, would stay with the company if it were sold. Rothschild did not return calls for comment.
Last week, American Apparel reported a 4.6% sales decline for 2010 and a net loss of $86.3 million. In its annual report, the company also said it had hired a financial advisory firm to help it explore alternatives for other sources of capital.
“We are working to develop and implement a plan to improve our operating performance and our cash, liquidity and financial position,” American Apparel said. “However, there can be no assurance that our plan to improve our operating performance and financial position will be successful.”
The clothing maker may look to raise as much as $8 million, according to a report from Bloomberg News. Shares of American Apparel fell 2 cents, or 2.4%, to 80 cents.
