At its peak in late 2007, American Apparel was valued at nearly $1 billion. Oh, how things have changed. A valuation analysis made public in US Bankruptcy Court proceedings on Thursday revealed the company is now worth somewhere between $180 million and $270 million.
Moelis & Company calculated the value contingent on American Apparel undergoing the financial restructuring plan the company proposed earlier this month, which will see American Apparel reduce its debt from $300 million to "no more than $135 million." Moelis was previously retained by the retailer in December 2014 to explore whether it could be sold, take on new debt or explore other transaction options. Eighteen parties evaluated the retailer's financial conditions, though none was ultimately interested in a deal.
American Apparel filed for Chapter 11 bankruptcy protection on Oct. 5 after months of steeply declining sales, layoffs, worker protests and ongoing legal battles with founder Dov Charney. Court documents show the company's yearly financial predictions through 2020, when it anticipates bringing in $318.5 million in sales and a net income of $23.7 million. (For comparison, the ailing retailer brought in $134 million in sales during the second quarter of this year, which ended June 30.) So if all goes to plan, post-bankruptcy American Apparel will be a much leaner business.