American Apparel Inc., plagued with falling sales and a plunging share price, may soon be booted off the New York Stock Exchange.
The NYSE has sent notice to American Apparel that the Los Angeles company did not meet its continued listing standards, according to a Friday filing with the Securities and Exchange Commission.
The stock exchange warned American Apparel that it could be delisted because its financial condition and mounting losses meant the company may not “be able to continue operations and/or meet its obligations.” Its shares have been hovering around 16 cents.
To avoid delisting, American Apparel has started preparing a plan for the NYSE detailing how it intends to regain compliance, the filing said. If the plan is accepted, the retailer will be subjected to “monitoring.”
“If the Company does not submit a plan or if the plan is not accepted,” the filing said, “the Exchange will commence delisting procedures.”
It’s just one more bad turn for American Apparel. Its sales and revenue have plummeted during a dramatic upheaval at the company which started when the board fired founder Dov Charney as chief executive last year.
The company has been struggling for years, with a net loss of nearly $384 million over the last 5 1/2 years. It was already threatened with delisting last year.
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