American Apparel’s third-quarter loss narrows as sales rise 5%
Los Angeles clothier American Apparel Inc. continued to struggle in the third quarter with red ink, but reported a narrower loss and a rise in sales.
For the quarter ended Sept. 30, the company reported a loss of $7.2 million, or 7 cents a share, compared with a loss of $9.5 million, or 13 cents, a year earlier.
Total sales rose 5% to $140.9 million. Online sales increased 11%. Comparable-store sales, an important barometer of a retailer’s health, rose 3%; American Apparel measures comparable-store sales as the combination of online sales and sales at stores open at least a year.
“The third quarter is an important signal that we’re bringing the company back to a pattern of profitability,” Dov Charney, the company’s chief executive, said in an interview.
Charney also said in a statement that the company is anticipating “improving sales, a reduction in raw material prices and continued efficiency in our manufacturing processes.”
The retailer, known for its colorful basics and racy ads, has been on an upswing after several quarters of sharp declines in its sales and share price. In an attempt to streamline, the company closed underperforming stores, shaved expenses and shook up its leadership.
The company ran so low on funds in the spring that it raised concerns that it would file for bankruptcy protection. The retailer was rescued by a group of Canadian investors, who agreed in April to invest as much as $45 million.
American Apparel also announced plans this year to open an online lifestyle shop on the auction site EBay Inc.
The company reported its third-quarter results after markets closed Monday. Its shares dropped 2 cents, or 2.25%, to close at 87 cents.
