Culture

American Apparel Has Filed For Bankruptcy; Ex-CEO Dov Charney Just Lost A Cool $8.2 Million

Couldn't have happened to a nicer guy!

by Meg Watson  6 October 2015

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The dream may be over. After 26 years of lycra leotards and leggings ostensibly designed for 13-year-old gymnasts, questionable hiring practices, sexual harassment suits, more than one dick-flashing incident, a five-year nose-dive in sales, and a failed re-brand, American Apparel has finally filed for bankruptcy.

This, but in a spandex unitard and $40 socks.

However, this doesn’t necessarily mean they’ll be closing up shop anytime soon.

With no layoffs or store closures yet announced, the deal made overnight has seemed to mainly effect the stockholders. In an effort to write off its accumulated $311 million in debt, the company has partnered with creditors and traded its bonds for equity. With their stocks rendered essentially worthless, the debt has now shrunk to around $120 million and the operations are able to continue as normal with full control transferred to the new lenders.

Though it doesn’t sound like it, this could actually be good news for the company — a huge Hail Mary by new CEO Paula Shneider to undo the damage she inherited at the beginning of the year. Time will tell how that plays out. But, the one thing we know for sure is that this is terrible news for founder and former CEO Dov Charney. According to The New York Times, on Friday his shares in the company amounted to about $8.2 million. Today they are worthless.

Considering this grade-A creeper’s history, people haven’t really been inclined to offer any consolation.

Whether Dov’s in the picture or not, the brand is still in definite trouble.

However admirable, their dedication to exclusively US-made products has made their prices exorbitant in a market that increasingly favours fast fashion. Alongside their relentless bad press, this is proving increasingly untenable as their young consumers feel less and less inclined to fork over $60 for shitty nylon tees. In line with trends around the world, Australian sales are still in a dangerously steep decline.

The company have just released their first statement on Twitter remaining upbeat about the whole thing, but today the little sisters and 12-year-old mallrats of world are going to need all the support they can get.