American Apparel has filed for bankruptcy protection.
The fashion retailer has reportedly reached a restructuring deal with 95% of its secured lenders in a bid to reduce its debts.
The company, based in Los Angeles, will apparently continue to trade during the bankruptcy process in the US. As a result of the deal, the brand’s debt is expected to drop from $300m to $135m.
According to The Telegraph, chief executive Paula Schneider said: “Throughout the implementation of this process, American Apparel will continue to operate its business without interruption to customers, employees and vendors.
“By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy.”