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05th Oct 2015

American Apparel Files For Bankruptcy Protection

The fashion retailer has reportedly reached a restructuring deal

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.

NEW YORK, NY - AUGUST 19: An American Apparel store is viewed on August 19, 2015 in New York City. The youth clothing retailer reported a net loss of $19.4 million for last quarter and has said it may go out of business in the near future. Blaming the closing of stores closing and a strong dollar, Los Angeles-based company said sales were down 17% last quarter. (Photo by Spencer Platt/Getty Images)

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.”