American Apparel Uses the B-Word

Posted on Apr 1, 2011

Flickr / anitasarkeesian

Troubled clothing maker American Apparel—its racy ads and its CEO under fire—has announced that it may be forced to file for bankruptcy.

Industry experts predicted the demise of American Apparel months ago, and its sales and stock price have tumbled as it struggles to stay afloat. —JCL

Reuters:

Clothing chain American Apparel, known for racy advertising and its founder’s legal problems, may file for bankruptcy if it does not get enough money to keep running, and might even have to liquidate, the company said.

Shares of the company, which is looking for other sources of cash and has hired a financial adviser, fell as much as 27 percent to 70 cents on Friday.

The statement, which was filed with the U.S. Securities and Exchange Commission on Thursday, is the latest threat to the Los Angeles-based clothing maker’s future.

It has been beset by accusations that it used a model who looked underaged in various states of undress, and that it relies on heavily sexualized advertising to attract the hip, young adults who buy its clothes.

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