In March of last year, American Apparel narrowly escaped a bankruptcy filing by securing an $80 million loan from Lion Capital to help meet a deadline on paying down another $51 million loan. Paying a loan with a loan would seem less than ideal, and turns out it probably was. Yesterday, American Apparel's shares tumbled 42 percent after the company revealed it didn't expect to fully meet its obligations as debtors to Lion. American Apparel is working with Lion to come up with an amendment so they are not in violation of the original agreement, but the uncertainty has caused the company to delay filing their results for the first quarter, ended March 31. The stock exchange doesn't like that, and has threatened to delist the company. Additionally, American Apparel announced they won't make financial predictions for the rest of the year, three more quarters, because of "highly uncertain sales trends" and the sticky situation with Lion Capital.
On March 31, American Apparel's debt totaled $91.4 million, while it had $36 million available in its U.S. credit facility and $4 million available in its Canadian credit facility. The company is now uncertain about its operating plan for this year. Lion Capital expects to work something out with American Apparel, but perhaps at the cost of its stock.
American Apparel says it is still reviewing and finalizing the numbers so it can file them. However, same-store sales look to be down about 3 percent in the U.S., 15 percent in Canada, and 16 percent abroad. The company is struggling to replenish its factory staff after being forced to lay off 1,500 in September, which hasn't been great for its numbers. But this is a company that consistently crawls out of its messes, or at least distracts from the last with a new one.
Most Viewed Stories
Jesse Williams and Aryn Drake-Lee Divorcing After Five Years of Marriage
Zeke Thomas Speaks Out for the First Time About Being Assaulted
Former Bachelor Chris Soules Reportedly Arrested After Fatal Crash
The Most Depressing Ways The Bachelor Couple Have Described Their Relationship
I Was the Queen Bee: 3 High-School Bullies Describe Their Reigns of Terror
Serena Williams Responds to Male Tennis Player’s Racist Remark About Her Pregnancy
Will We Abandon Women’s Rights in the Name of Progressive Politics?
All the Cool Girls Had One: 16 Women on Teen Status Symbols
What It’s Like to Have Tina Fey As a Mentor
Ask a Boss: How Do I Ask to Work From Home?
Latest News from The CutWe Will Soon See Some ‘Formation Scholars’ In College Thanks to Beyoncé
She wants to reward women who are “bold, creative, conscious and confident.”Serena Williams’ Pregnancy Announcement Was Completely Unintentional
Not that she regrets it.Should You Be Boycotting SheaMoisture?
The CEO answers your burning questions.This Photographer Examines African Beauty and Beyoncé
A new exhibition by Émilie Régnier at the Bronx Documentary Center.The Most Iconic Queen Bees in Pop Culture
▶️ “That’s right. Rule, b****. But don’t forget who made you.”See Selena Gomez’s Cute New Short Haircut
Chop, chop.Ikea Would Like You to Consider Its 99-Cent Tote Over Balenciaga’s $2,145 Version
The resemblance is uncanny.A Dead Woman’s Fitbit Data May Lead to Her Husband’s Murder Conviction
Richard Dabate is accused of killing his wife Connie, and her last recorded steps on Fitbit are part of the case against him.Your Relationship Status Might Affect Your Baby’s Fussiness
A study linked new moms’ relationships to how much their babies cried.See the Old-School Glamour of Palm Springs Come to Life in This Season’s Saturated Shades
Photography collective JUCO takes today’s ‘70s-inspired fashions to the southern-California desert retreat.
She thinks the label is “unproductive.”J.Crew Is Cutting 250 Positions and Moving Around Their Top Management
They’ll save $30 million annually.Somehow Woody Harrelson Is Hollywood’s Girl-Squad Fairy Godmother
Step aside, Taylor Swift.Stuart Weitzman Is Having a Secret 30 Percent Off Sale Right Now
Save at least $100 on suede ballet flats and patent-leather heels.4 Full-Body Moves From Drake’s Trainer
Workout gifs from the man who helped sculpt Drake.All the Cool Girls Had One: 16 Women on Teen Status Symbols
Talking to Molly Ringwald, Judy Blume, Aly Raisman, Marilyn Minter, and more.Saudi Arabia’s Appointment to UN Women’s-Rights Commission Sparks Outrage
This is a country that still uses a male-guardianship system.Disney Invented the Coolest New Makeup Technology
No, it has nothing to do with princesses.I Never Thought My Big Boobs Could Fit in a Bralette Until Now
It’s all about the hidden underwire.Republicans Are Still Pushing Trump to Sign a ‘Religious Liberty’ Order
The order would essentially legalize discrimination against LGBTQ people.