How American Apparel manages to receive huge amounts of capital from investors seemingly every year, yet still remain on the edge of bankruptcy, is a mystery we’ll never be able to solve. Last year, as you may recall, the company was spared bankruptcy just in the nick of time by a group of Canadian investors who supplied Dov Charney & co. with a $15 million cash injection, with the option to receive $28 million over six months. This was a little less than a year ago and evidently, the company is already strapped for cash again, and, of course, there’s an investment firm ready to give them lots of it. $80 million in credit, to be exact.
The New York Post is reporting that a firm backed by 81-year-old billionaire George Soros (left) intends to extend a nearly $80 million line of credit to the Los Angeles-based retailer. Whether or not it’s relevant, the paper also points out that George Soros is currently being sued for $50 million by his 31-year old Brazilian soap star ex-girlfriend, so he and Dov Charney have so much in common because they’re both “entangled in lawsuits with young, beautiful women.”
According to the Post, Charney fell short of his goal to make make 20 million dollars of Ebitda (earnings before interest, taxes, depreciation, amortization) last year, but sales momentum did pick up. So could this finally be the road to recovery for American Apparel? Charney, whose business savvy has been less than impressive for the most part, does seem to have some semblance of a plan now which this line of credit would help to execute; but at the same time, we feel like we’ve been asking this question for years, so only time will tell.