American Apparel stocks dropped sharply on Thursday after news broke that the retailer had hired restructuring advisers. According to the Wall Street Journal, American Apparel has brought on lawyers from Skadden, Arps, Slate, Meagher & Flom in light of weak sales and ongoing debt.
This isn’t particularly surprising; bad financial news is nothing new for the company. American Apparel has kept itself afloat with cash infusions to avoid bankruptcy more than once. But word that the retailer had hired outside advisers Thursday caused stocks to drop 32 percent, closing the day at $.66. Over the last six months, shares have been hovering at a little over $1.
According to a report from Feb. 6., American Apparel brought in net sales of $45.5 million in January, down 1 percent from 2013. The holidays were tough for the retailer, which brought in $60.5 million in net sales for December, a decrease of 6 percent as compared to the year prior.
WSJ reports that there is no restructuring plan in place just yet. After years of putting a Band-Aid on its debt problems, might this be an opportunity for the perpetually embattled retailer to finally turn things around? We’ll be watching to see.