American Apparel closing its first store, in Echo Park
American Apparel said it was closing its first store.
Struggling retailer American Apparel is closing down its first U.S. store, in Echo Park.
The Los Angeles retailer, which filed for bankruptcy protection in October, is closing stores as part of an effort to revive its flagging business.
“The store closure is a next step in implementing our previously announced turnaround plan, which includes closing under-performing locations and investing in new stores in promising areas,” the company said in a statement.
American Apparel was mostly a wholesale operation before opening its first U.S. store on Sunset Boulevard in Echo Park. On its website, the company called that store “the turning point.”
The company did not give an official closing date, but an employee said they have been told Jan. 8.
The 5,300-square-foot space is already listed for leasing, according to LoopNet. It will be available in February. The store’s closure was first reported by the Eastsider.
Earlier this month, Dov Charney, the former chief executive who was ousted by the American Apparel board last year, said he was taking steps to return to the company he founded.
Charney announced that he is “exploring plans with investors and industry executives in an effort to develop a value-maximizing solution” for the struggling retailer. It is the first public step he’s taken to regain control since the struggling firm filed for bankruptcy protection.
In response, American Apparel said Charney had expressed interest in buying the company but that there was “currently no transaction for the board to consider.”
Since the board pushed out Charney in June 2014, the company has continued to struggle. Charney, who owns about 40% of the company’s stock, was fired after an investigation into alleged inappropriate behavior and misuse of company funds.
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FOR THE RECORD
5:06 p.m.: An earlier version of this post said American Apparel’s first store was in Echo Park. Its first store was actually in Montreal; the Echo Park location is the company’s first U.S. store.
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Charney has denied the allegations.
The company’s restructuring agreement would take the company private and hand nearly 100% control to its largest bondholders.
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