American Apparel founder Dov Charney has filed for bankruptcy
Dov Charney, founder of American Apparel Inc. has officially filed for bankruptcy.
Charney first created American Apparel in the 1990s and the brand quickly became one of America’s most popular retailers. The brand was founded on its made in USA philosophy and is often remembered for its “sex sells” advertising. The Los Angeles-based label became a publicly traded company in 2007, but within a few years the brand was unable to maintain its capital. In 2015, American Apparel filed for its first of two bankruptcies.
At the height of its success, American Apparel had sales of over US$600 million in hundreds of stores, employing thousands of people in the United States and Canada. Now, according to fashion company, Charney was forced to declare bankruptcy because he owed US$30 million to a hedge fund. This led to the closure of all its outlets and a focus on e-commerce, right after the brand’s second bankruptcy. His attorney William N. Lobel said, “They pressured him. It seems like the best way to handle this at this point is with bankruptcy.
Since the company’s decline, Charney has not given up and made several attempts to take over the business. However, he was never able to receive the necessary financial backing to sustain the business. Charney is also ordered to close his last clothing store business, Arya’s Vintage Closet in Costa Mesa, Calif., which also filed for bankruptcy.
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