American Apparel’s past year and a half has been a miniseries-worthy saga. The latest in its up-and-down recent history? The company hinted that it may have to file for bankruptcy. According to Fortune, sales have fallen 17.2 percent, and AA may not have enough cash to get through the next fiscal year. As AA put it in a regulatory filing last night, “We believe that we may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.”
The news comes after extensive press about the brand’s attempts to redefine itself under new chief Paula Schneider and to distance itself from the overtly sexual imagery it became known for during founder Dov Charney’s heyday. As an alternative to that approach, the brand promised social commentary and increased emphasis on its Made in USA credibility. But now it remains to be seen if it will even stick around long enough to drive that message home.
That said, American Apparel’s unexpected openness about its financial woes reads a little like an attempt to attract a white knight. Watch this space.