American Apparel requests approval to close eight additional stores

By Caroline Salls

Pittsburgh, Dec. 23 – American Apparel, Inc. requested court approval to close eight additional stores, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

American Apparel said it received court approval to conduct store closing sales at nine of its locations near the beginning of its bankruptcy case. At that time, the company said it advised the court and stakeholders that it was continuing to analyze its retail portfolio and might later decide to close additional underperforming stores.

The company said the stores covered in Tuesday’s motion do not fit within its turnaround business plan.

The additional stores are in Los Angeles, Santa Monica, Santa Clara and San Diego in California, Norwalk, Conn., Jersey City, N.J., Tigard, Ore., and Madison, Wis.

According to the motion, the eight additional stores meet some or all of its closure criteria, including a lease that will soon expire without securing an extension, a lease that is overpriced or a lack of desired turnaround in sales during November and early December.

American Apparel said it will close these eight stores before emerging from bankruptcy and is seeking court approval to conduct closing sales at the stores in question.

The company said it plans to transfer most of the stores’ inventory to a distribution facility in La Mirada, Calif., over the next two weeks. This inventory will be sold online or redistributed to stores around which American Apparel plans to reorganize.

Once the sellable inventory is transferred, all remaining inventory in the closing stores, which will consist of excess, clearance, obsolete or distressed inventory, will be sold in the additional stores.

American Apparel, a Los Angeles-based manufacturer, distributor and retailer of branded fashion basic apparel, filed bankruptcy on Oct. 5. The Chapter 11 case number is 15-12055.

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