Saturday, 23 April 2011

American Apparel May Receive up to $43 Million From Canadian Investors to Prevent Bankruptcy

American Apparel, a Los Angeles vertically-integrated apparel company, has not been doing well financially. When the 2010 4th quarter financial statement was released at the end of March showing a 19.3Million USD net loss in worth compared with a net profit the previous year, American Apparel began looking for investors in order to prevent bankruptcy. They needed at least 10-15 Million USD, and have managed this last week to secure up to $43 million in financial investments, a good portion of which comes from Canadian investors. American apparel is on Scriptsmart's list of gift cards to avoid due to financial instability. Investors will buy shares at a rate of $.90 USD/share, a significantly lower rate than American Apparel's stock value at the end of this week ($1.24USD/share). To further complicate matters, American Apparel and its CEO, Dov Charney, are currently involved in sexual harrasment lawsuits.

For more information, I also recommend checking out this online article written by Jim Edwards on CBS's Bnet website. 

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