American Apparel has been approved a $90 million restructuring plan supervised by Standard General hedge fund, according to Reuters. It’s the same hedge fund that rescued RadioShack earlier this year.
American Apparel, known as the country’s largest “Made in the U.S.A” brand, torn apart by debt and excess inventory, can now hope for a second chance after its bankruptcy protection, filed on Monday, was approved a day after. Over 8,500 employees worldwide need to thank judge Brendan Shannon after she granted $90 million in financing to pay bills, including wages.
“It is a unique product that can really stand out. People still want to go into stores, feel the fabric and try it on,” said Burt Flickinger, managing director of retail consultancy Strategic Resource Group, cited by Reuters. American Apparel is an appealing brand for customers, known for its sexually charged advertising and tight T-shirts, and its comeback seems very possible, especially that Monarch Alternative Capital, another hedge funds, will help with other $70 million over the
next six months.
Alongside bills and wages, the money will be used to boost Internet sales and to give American Apparel a new look, meant to rebuild the brand, kind of dusty in recent years. Unlike RadioShack and Blockbuster, who where in a similar situation, American Apparel has all the advantages to redeem itself.
American Apparel will keep its California manufacturing base, hopefully helping the retailer fill the stores with its products before the December holiday season and be aside with fast-fashion brands like H&M and Zara.
The company, with $600 million in net sales in 2014, had their shares spent from trading on Tuesday ahead of their delisting from NYSE MKT. Currently, its market value is $20.5 million.