American Apparel Receives Speculation for Impending Sale, Lawsuit, and Factory Relocation

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The U.S. clothing store that prides itself for being made in L.A, American Apparel, has hired Houlihan Lokey bank to find a possible buyer for their company since filing bankruptcy six months ago. Dov Charney, American Apparel’s past chief officer and founder has commented when the company filed bankruptcy that the retail stores have struggled to bring in revenue and need to make bigger changes in the future to ensure their company stays competitive in the fashion world. Currently, American Apparel’s press agents have stated that the impending sale and possible buyers who are interested in buying the company is being kept confidential.

The only thing Charney admitted to the press previously was his plans to buy back the company from its creditors who own the store currently by placing his own bid. With Hagan Capital and Silver Creek Capital as his investors, he confirms that he placed a bid for $300 million to buy the company, but it was turned down last January.

Even though Charney was fired from the CEO position from the company in 2014, he is still not trusted by other American Apparel employees who continue to blame him for the company’s bankruptcy. He has been accused of misusing company funds and inappropriate behavior.

To make matters worse, American Apparel is planning to lose its L.A manufacturing facility since the company has to pay each of their factory employees a minimum wage in the coming future. By the year 2020, California minimum wage is set to be around $15 dollars an hour.

American Apparel is now looking into moving their factory South, possibly to North Carolina, South Carolina, or Tennessee, where their minimum wage is set to stick close to $7.25 an hour in the future (depending on current legislation).

The lease for the L.A factory is out in 2019, but the company has reported that they plan to keep its design team based in L.A.

Yet American Apparel is getting hammered again with negative speculation in the media. In L.A Superior Court, former factory workers filed a suit for wrongful termination and unpaid overtime. They also claim that while working at their L.A factory, they were punished for expressing concerns about bad working conditions and discrimination.

American Apparel released a statement saying that the company does not retaliate against rumors and speculations.

Enjoys expensive fashion...at a discount. Five foot four young adult who loves all types of music: from pop to death metal. I still fall for the common cliché plot twists of a romance novel and love it. I am an avid doll collector and play the viola when no one is watching. Sadly my least favorite things are exercising and dieting; yet my New Year's resolution this year was to give up sugar. My stubborn determination to keep my word has changed my favorite drink from Pepsi to unsweet tea. If I’m not writing, I am either spending my time petting my cat Toby or watching all CW shows.

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