American Apparel has filed for bankruptcy
American Apparel, the clothing store home to the clear PVC skirt and £12 fashionable plastic bag, has filed for bankruptcy protection.
The California-based company has revealed in a statement that it's reached a restructuring support agreement with 95% of its secured lenders to reduce its debts.
I can't believe American Apparel's policy of being infinitely lecherous and boundlessly horrible has somehow led to bankruptcy.
— Kaleb Horton (@kalebhorton) October 5, 2015
The new deal will see lenders provide 90 million US dollars (£59 million) to tackle American Apparel's debt and interest payments, writing off more than 200 million US dollars (£131 million) of bonds in exchange for equity interests.
The clothes store hopes its new financial plan will reduce its 300 million US dollars (£197 million) debt to no more than 135 million US dollars (£89 million).
No surprise that American Apparel have gone bankrupt, there was a limited amount of time they could sell plain white t-shirts at £24 for!
— Marshall ✈ (@marshall_mcf) October 5, 2015
American Apparel's financial bankruptcy matches its spiritual bankruptcy quite nicely.
— Tom Ceraulo (@tceraulo) October 5, 2015
In August, American Apparel flagged up problems with its finances, saying it might not have enough cash to keep the firm going for the next 12 months as losses widened.
And now the company expects to drag itself out of the deep, dark pit of debt in an estimated six months, and says the restructuring won't affect customers, employees or vendors.
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