American Apparel Sees First Quarter Net Loss Jump
American Apparel reported that in the first quarter of this year it had a net loss of $26.4 million, or 15 cents a share, compared with $5.5 million, or 5 cents a share, last year.
Net sales for the first quarter of 2015 were $124.3 million, down 9 percent compared with $137 million for the same period last year.
The troubled company, which makes its apparel in its own downtown Los Angeles factory, has been clearing out slow-selling merchandise by holding sales at its fleet of 239 stores.
Inventories in the first quarter ending March 31 decreased $25 million, or 17 percent, compared with the same period last year.
The company has been through a tumultuous time with the firing late last year of its founder and Chief Executive Officer Dov Charney. He was replaced at the beginning of the year by apparel veteran Paula Schneider, who last month laid off about 180 factory workers.
“American Apparel is an iconic brand with a loyal customer following and tremendous global brand awareness. The new executive management team and board of directors is committed to driving shareholder value and has implemented the initial phase of a multi-year strategic turnaround plan designed to improve operating and financial results over the long term,” the new chief executive said.
At the same time, the company announced it would be selling $10 million worth of common stock through Cowen and Co. The company plans to use the funds for working capital and general corporate purposes.
The company’s stock has been trading at about 61 cents a share on the New York Stock Exchange.