American Apparel Founder Dov Charney Has Filed for Bankruptcy
After several attempts of reviving the company, Charney was never able to secure the funding.
Dov Charney, founder of American Apparel Inc. has officially filed for bankruptcy.
Charney first built American Apparel in the 1990s and the brand quickly became one of the most popular retailers in America. The brand was founded on its made-in-USA ethos and was 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 sustain its capital. By 2015, American Apparel had filed its first of two bankruptcies.
At the height of its success, American Apparel made over $600 million USD in sales from hundreds of stores, employing thousands of people across the U.S. and Canada. Now, according to Business of Fashion, Charney has been forced to declare bankruptcy since he has owed $30 million USD to a hedge fund. This led to the shut down of all its outlets and a focus on e-commerce, right after the brand’s second bankruptcy. His attorney William N. Lobel said, “They’ve been pressuring him. It looks like the best way to handle it at this point is with a bankruptcy.”
Since the decline of the business, Charney has not given up and made several attempts at taking back the company. However, he was never able to receive the financial backing needed to sustain the business. Charney is also ordered to close his latest clothing store venture, Arya’s Vintage Closet in Costa Mesa, California, which has also filed for bankruptcy.
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