American Apparel Sale Negotiations Stalled

The Irving Place Capital, backed by Dov Charney, the former chairman, President and CEO of American Apparel Inc., acquired the American Apparel Apparel at $1.30-1.40 per share in December last year, which prompted the stock price to rise to a recent high of $1.14. At the time of the deadline, American Apparel Inc. (NYSE MKT:APP) fell 0.75% to 0.755 dollars on Tuesday afternoon, down 33.8% from its December high.

Bloomberg quoted market sources saying that after several months of negotiations with American Apparel Inc., Irving Place Capital had shaken its valuation and felt that American Apparel The Inc. board is more inclined to finance and redeem companies that continue to lose money, rather than seeking to sell them. It is reported that more than 10 potential buyers including Irving Place Capital have signed a confidentiality agreement.

Irving Place Capital is a New York based investment fund. It has invested in the US youth apparel retailer A ropostale Inc. (NYSE:ARO) and high-end shoe brand Stuart Weitzman Holdings LLC, which was divestment in 2002 and 2010 respectively. Currently, it owns the share of the apparel retailer, the company's brand and the clothing brand.

New York hedge fund Standard General LP is now the largest single shareholder of American Apparel Inc.. Last June, when Dov Charney was expelled by American Apparel Inc., it increased its shareholding ratio to 42.98% by July Standard General LP, becoming the largest shareholder of the group, but immediately transferred all its shareholdings and voting rights to Standard General LP. Standard General LP subsequently reorganized American Apparel Inc., and the board of directors removed 5 of the original 7 directors and joined the 4 directors nominated by them. Board of directors Exercise control. It is this board controlled by Standard General LP that made the decision to formally dismiss Dov Charney and appointed Paula Schneider as the new CEO.

and Standard General Investors close to LP disclosed that the hedge fund wanted to focus on the long-term development of American Apparel Inc. and had no intention to sell it. And Dov Charney may initiate proceedings against American Apparel Inc. (NYSE MKT:APP), which will make transactions even more complicated.

American Apparel Inc. expanded to a net loss of $19 million 200 thousand in the three quarter ended September 30, 2014, or a loss of $0.11 per share, far exceeding the $0.04 expected by the market. Net loss and share loss were 1 million 500 thousand US dollars and 0.01 US dollars in the same period last year. Net sales fell 5.3% to $155 million 900 thousand, or less than the market forecast of $162 million 400 thousand, the highest since the fourth quarter of 2010.

At the end of the three quarter, American Apparel Inc. had a net cash of $9 million 400 thousand, a decrease of $800 thousand over the two quarter. Next month, the company needs to repay a bond interest of more than 13 million dollars, and the company may get the $15 million unsecured loan promised by Standard General LP before that.