Dov Charney, the ousted founder, Chairman and CEO of American Apparel, announced in a press release that he is in talks with potential investors about making a bid for the company. Mr. Charney said he has hired Cardinal Advisors LLC, a Los Angeles investment bank, to advise him on an evaluation of strategic alternatives involving the company. The announcement said:
Mr. Charney is confident that new and existing investors, working with him and his team of industry leaders, would be able to realize significant long-term value for American Apparel’s stakeholders, including its thousands of employees, by reviving American Apparel’s sales and profitability, while preserving and creating fair wage job opportunities in the apparel industry.
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Mr. Charney, who was fired a year ago over allegations of misconduct, would face an uphill battle in winning back the company he started in 1989 as a T-shirt maker. American Apparel filed for chapter 11 bankruptcy protection in October and is now completing a reorganization that would exchange about $200 million worth of debt for equity. That step would wipe out shareholders, including Mr. Charney, who is the Los Angeles-based retailer’s largest stockholder.
WSJ reports that American Apparel’s advisers received a letter several weeks ago indicating that Mr. Charney was interested in making a potential bid for the company, but it was unclear whether he had secured the financial backing, some of the people familiar with the matter said. Discussions haven’t progressed from there, these people said.
For the nine months through Sept. 30, the company lost $65 million on $385 million in sales. It has about 9, 000 employees and more than 200 stores.
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