American Apparel files for bankruptcy in US
American Apparel has filed for bankruptcy in the US after almost a year of turmoil that saw its founder fired from the fashion retailer.
The brand, which had become known for its controversial advertising as well as its American-made clothing, said it had the support of about 95% of its secured lenders for a restructuring support agreement.
It plans to keep stores open and maintain manufacturing as normal.
The bankruptcy filing, which had been anticipated by many in the industry, follows a chaotic period in the company's 26-year history.
It sacked founder Dov Charney as chief executive in December for alleged misconduct.
Charney has since fought back, launching several law suits against the company claiming defamation and breach of contract.
American Apparel had not made a profit since 2009.
The retailer said the restructuring will slash debt by $165 million (£108.4 million) to $135 million by eliminating $200 million in bonds in return for equity in the revamped company.
“By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy,” chief executive Paula Schneider said in a statement.
Some of American Apparel's adverts were banned by the Advertising Standards Authority in 2013 for being "overtly sexual" and "gratuitous", while another raised concerns about models being vulnerable.
Additional reporting by Reuters
