LOS ANGELES, July 6, 2015 /PRNewswire/ -- American Apparel,
Inc., (the "Company") (NYSE MKT: APP), a vertically integrated
manufacturer, distributor, and retailer of branded fashion-basic
apparel, announced today the next phase of its strategic turnaround
plan, including a redesigned fall merchandise line, approximately
$30 million in cost-cutting
initiatives, and key additions to its leadership
team.
For the first time in the Company's history, later this year,
American Apparel will unveil a new fall line focused on advanced
basics and key items in both men's and women's. "Historically, the
fall season has not been a major focus for the Company. We are
beginning the process of re-merchandising the product assortment in
our retail stores to increase productivity by SKU," said
Paula Schneider, recently appointed
Chief Executive Officer of American Apparel. "The new styles are
designed to increase revenue as we continue to evolve our product
offering during this important selling season," added Ms.
Schneider.
In addition, the Company is undertaking a series of cost
reduction initiatives to better align its cost structure with the
headwinds of today's highly competitive, promotional retail
environment and volatile foreign exchange markets. These
initiatives are expected to reduce operating expenses by
approximately $30 million over the
next 18 months. Among other initiatives, cost-cutting measures will
include closing underperforming retail locations to drive
productivity improvements. In connection with these store closures,
the Company will streamline its workforce to reflect a smaller
store footprint and general industry conditions. Going forward, the
Company will look to add new stores in profitable fast-growing
territories while reducing its footprint in unprofitable and
over-saturated markets.
These initiatives, some of which will begin immediately, are
aimed at stabilizing the Company financially by maximizing retail
store performance and revamping the Company's product merchandise
assortment. Management continues to address a host of legacy issues
including improving SKU mix, rationalizing the Company's real
estate portfolio, strengthening the brand's creative marketing,
maximizing new retail, e-commerce and wholesale opportunities,
increasing supply chain agility, and improving expense management
processes. In addition, management is defending the Company against
approximately 20 lawsuits and administrative actions initiated by
Company founder Dov Charney and his
associates. The Company believes these cases are meritless and
intends to vigorously defend such actions and, where possible,
pursue remedies against Mr. Charney for his actions.
Even if American Apparel increases revenue and cuts costs, there
can be no guarantee that the Company will have sufficient financing
commitments to meet funding requirements for the next twelve months
without raising additional capital, and there can be no guarantee
that it will be able to raise such additional capital.
"We are committed to turning this company around. Today's
announcements are necessary steps to help American Apparel adapt to
headwinds in the retail industry, preserve jobs for the
overwhelming majority of our 10,000 employees, and return the
business to long-term profitability. Our primary focus is on
improving the processes and product mix that have led to steep
losses over the past five years," said Schneider. "Our customers,
employees, and local communities around the world believe that
American Apparel is an iconic brand that deserves to succeed. My
job is to make that a reality."
In addition, the Company announced the hiring of Christine Olcu as General Manager of Global
Retail and Brad Gebhard as President
of Wholesale to help execute its global retail and wholesale
turnaround strategies.
Olcu will lead the Company's current retail country managers in
optimizing merchandizing and sales at American Apparel's store
locations. She will also facilitate the Company's ongoing fleet
optimization, and actively improve store productivity. Olcu has a
strong background in building retail businesses of various sizes,
having held senior leadership roles at companies including Express,
Mexx Canada Company, Indigo Books,
Music, Inc., and Club Monaco, Inc. Long-time valued manager
Nicole Gabbay will remain in her
current position as President of U.S. Retail.
Gebhard will serve as President of Wholesale, focusing on
increasing the Company's imprintable and business-to-business
sales. He will also oversee Oak, a New
York-based specialty retailer the Company acquired in 2013.
Gebhard has served as a consultant to American Apparel for the past
four months and already has a deep understanding of the Company's
business and processes. He has held senior leadership, operational,
and branding roles at apparel companies, including Nike, Speedo
USA, Columbia Sportswear, and
Adidas.
Schneider stated, "We are looking forward to working with
Christine and Brad to leverage their expertise, which will be
invaluable in delivering compelling products to our customers. We
are proud of our heritage as the largest apparel manufacturer in
North America, and the initiatives
announced today are designed to enable us to return to
profitability so that we can continue to serve our loyal customers
and provide fair wages to our dedicated employees for years to
come."
About American Apparel
American Apparel, Inc. is a vertically integrated
manufacturer, distributor, and retailer of branded fashion-basic
apparel based in downtown Los Angeles, California. As of March 31, 2015, the
Company had approximately 10,000 employees and operated 239 retail
stores in 20 countries including the United
States and Canada. The Company also operates a global
e-commerce site that serves over 50 countries worldwide
at http://www.americanapparel.com. In addition, the Company
operates a leading wholesale business that supplies high quality
T-shirts and other casual wear to distributors and screen
printers.
Forward-Looking Statements
This press release may contain forward-looking statements which
are based upon the current beliefs and expectations of our
management, but are subject to risks and uncertainties, which could
cause actual results and/or the timing of events to differ
materially from those set forth in the forward-looking statements,
including, among others: implementing the cost savings initiatives
described above and maintaining cost savings from them; the impact
on our business of the cost reduction actions discussed herein;
completing our reductions in workforce and facilities on any
particular or expected timeframe; finalization of employee
severance arrangements; the impact and outcome of present and
future litigation; effectively carrying out and managing our growth
strategy; our ability to obtain financing on favorable terms
or at all; and other risks detailed in our filings with the
Securities and Exchange Commission, including our 2014 Annual
Report on Form 10-K, as amended. You are urged to consider these
factors carefully in evaluating the forward-looking statements
herein and are cautioned not to place undue reliance on such
forward-looking statements, which are qualified in their entirety
by this cautionary statement. The forward-looking statements speak
only as of the date on which they are made and the Company
undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
Media Contact:
Weber Shandwick
Liz Cohen
(212) 445-8044
Investor Contact:
ICR
John Rouleau
(203) 682-8342
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SOURCE American Apparel