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AMERICAN APPAREL: turnaround plan activated

US CHAIN American Apparel announced cost cutting initiatives intended to reduce its operating expenses by around USD 30m over the coming 18 months. These include the closure of underperforming stores and the overall reduction of the workforce to reflect a smaller store footprint and general industry conditions. Later this year, for the first time in its history, the chain will introduce a new A/W line focused on advanced basics and key items in men’s and women’s wear. Nevertheless, the chain said that even if it increases revenue and cuts costs, there can be no guarantee that it will have the resources to meet funding requirements for the next 12 months. CEO Paula Schneider commented: “Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years. Our customers, employees and local communities believe that American Apparel is an iconic brand that deserves to succeed and my job is to make that a reality.”

 

American Apparel

American Apparel

The positive image of the chain is such that, if early turnaround measures prove successful, fresh financial resources could well be found after all.

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