Fast Fashion Clothing Brand American Apparel Reprieve

Fast fashion big coffee American Apparel slow down

Across the globe, American Apparel, the originator of the North American industry, has fallen to the bottom.

US clothing retailer American Apparel filed for bankruptcy protection and planned debt restructuring.

American Apparel exclusive response to reporters, the company has secured 95% of the secured creditor support, restructuring is expected to last 6 months.

During this period, global store operations, including China, are not affected.

Yang Dayun, President of the excellent international fashion brand investment company, said that despite the chance of breathing, the American Apparel's pformation is difficult, and it is unlikely that it will be able to tide over this trough.

Normal operation of mainland stores

American Apparel8 has revealed that as of August 11th, the group had $11 million 200 thousand in cash.

Previously, the group has said that the company's cash will not support 12 months' operation. If there is no new financing, the group will not be able to repay the maturity debt interest of $13 million 900 thousand in October 15th.

In October 4th, American Apparel filed for bankruptcy protection.

American Apparel said bankruptcy reorganization is expected to last 6 months.

This will help companies reduce their $300 million debt to $135 million, thereby reducing the company's annual interest payments by $20 million.

It is understood that American Apparel has reached an agreement with a number of creditors, about $200 million claims will be converted into restructured company equity.

In the process of restructuring, American Apparel will receive $90 million of new capital from creditors, and has now completed 70 million dollars.

Paula Schneider, chief executive of American Apparel, said that restructuring should maintain the status of American Apparel, the largest clothing manufacturer in North America.

American Apparel responded that the company has been supported by 95% secured creditors, which will help ensure financial stability during the restructuring period.

Asset restructuring will help companies revitalize their brand by changing strategies.

Reporters found that the adoption of American Apparel

Store management is vertically managed by US headquarters, and no branch is established in China.

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Although American Apparel believes that the global shops, including China, are not affected by bankruptcy reorganization, it is intriguing that the head of the Chinese store's future plan has not responded positively.

Reporters learned that at present, American Apparel has two stores in the mainland only in Beijing: Sanlitun Taigu shop and Qiao Fu fragrant grass store.

Among them, Qiao Fu fragrant grass store is the largest store in American Apparel Asia, and two stores share a store manager.

The store manager said that the two stores were directly sent to Beijing by American companies, and consumers were buying different channels from the official website.

For the American Apparel bankruptcy reorganization news, the store manager said he did not know before, and has not received any notification from headquarters at present.

Reporters in the American Apparel overseas Chinese restaurant found that some merchandise discounts were as low as 70 percent off, and the shop director said the discount was for normal discounts for summer wear and old ones.

In addition to shops, American Apparel's official website shopping channel and Sina official micro-blog are also in normal operation.

Market value is only 1/25

Reporters learned that American Apparel was the fastest growing fast fashion brand in the United States, the main sex marketing and the United States made.

Although the first store was opened in 2003, American Apparel has opened more than 450 stores worldwide after five years.

However, after the outbreak of the international financial crisis in 2008, American Apparel began to decline.

Yang said that American Apparel is a favorite brand among young people in the United States, but since four or five years ago, both the style design and the adaptability to the market have been deteriorated.

Aging is serious, sexy marketing strategy is no longer effective, making sales of American Apparel all the way down. After the financial crisis in 2008, American Apparel performance failed, debt increased, and the company was in an operational dilemma.

Coincidentally, AF, which is similar to its development model, is also falling rapidly after its development peak.

Garment independent analyst Ma Gang revealed that American Apparel was the main manufacturer in the United States and the production line was placed in the United States. This practice increased the production cost and made the brand less competitive at present.

The failure of development strategy has led to huge losses in recent years and increasing debt burden, which has brought American Apparel into deep water.

According to the latest performance report of American Apparel, the company lost a net loss of $19 million 400 thousand in the two quarter of June 30th, a net loss of $16 million 200 thousand in the same period last year.

Revenue fell by about 17% to $134 million 400 thousand, down four consecutive quarters and 14% in the same store.

Since 2010, the cumulative loss of American Apparel has reached US $338 million.

American Apparel, which has a market value of more than 500 million dollars in the peak period, has now shrunk to 20 million dollars.

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At the same time, the company's internal problems in recent years, the brand image has been battered.

Last year, the company's founder and former CEO Dov Charney plunged into a scandal of sexual assault. Then Dov Charney was expelled from the board by the board of directors, but is still continuing a lawsuit with the company.

In August, American Apparel got into a lawsuit because of the $81 thousand of the long-term supplier of cloth.

Yang said that the problems in the US headquarters have led to the rapid expansion of fast fashion brands in China in recent years. American Apparel has no time to take account of the Chinese market and lack a clear positioning of the consumer market in the Chinese market.

Reporters found that during this period, ZARA, H&M and UNIQLO have been expanding madly in China.

Take UNIQLO as an example. As a Japanese brand, mainland China has become the largest overseas market of the company.

In Tmall flagship store, the most popular single product sales exceeded 30 thousand in October.

At the same time, the strong North American style of collocation and accessories is not localized, which has lost the best time to develop in the Chinese market.

Can brands escape?

Wang Zhibin, director of Securities Division of Shanghai Jay Sai law firm, told reporters that American Apparel relieved the company's debt burden by paying some of its equity, but this did not guarantee that it would not go bankrupt in the future.

Debt restructuring is actually a game and compromise between creditors and companies. The reason why creditors of American Apparel agreed with the company to restructure rather than immediately went bankrupt was mainly due to the fact that once the company went bankrupt and implemented property liquidation, property would be left behind and creditors would lose larger.

Through restructuring, creditors hope that American Apparel can survive the recession and generate profits in order to get profits.

American Apparel CEO Paula Schneider said in a public statement that restructuring will make the company more powerful and dynamic.

The company will improve its financial base, readjust its business layout and change its strategic direction. At the same time, it will introduce new design concepts and positive marketing plans, invest in new stores, develop e-commerce business and create new marketing activities to promote the continuous development of the overall business.

Yang Dayun told reporters that although American Apparel was not immediately bankrupt, the brand was actually included in the list of brands to be eliminated five years ago in the US.

"Although the brand has to go through the climax and the trough, the problem of American Apparel is hard to get through, and it is very likely that it will not be able to tide over this difficulty."