3 hours ago | By Sandra Halliday
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Aug 18, 2015
By WGSN Insider
Troubles look to be piling up at American Apparel. After admitting last week it may not have enough capital to sustain operations for the next 12 months, it reported late Monday losses widened, sales fell again and cash flows turned negative.
As of August 11, the retailer had about $11.2m in cash.
But all it not lost, for now at least. American Apparel has reached an agreement with creditors for a $90m asset-based infusion, averting default.
The retailer warned Monday a bankruptcy threat remains after a poor string of results and its lowly projections for the next four quarters.
All that comes as the company said net loss for Q2 to June 30 widened to $19.4m/11 cents per share from $16.2m/9 cents a year ago. Sales fell 17% to $134.4m.
The company, which has been staving off bankruptcy through a series of cash infusions, last amended its $50m line of credit with Capital One in March, according to regulatory filings.
The company’s stock, which ended the year at $1.03, closed Monday at 15 cents.
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