American Apparel Flirts With Bankruptcy

Get your leggings while you still can: American Apparel is in deep trouble, as the clothing company admitted that its ability to continue operating is a “going concern”—foreshadowing a possible bankruptcy filing. The retailer expects a loss of $5 million to $7 million for the quarter ended June 30 compared with a second-quarter loss of $7.3 million. The company operates 260 stores in 19 countries. The most immediate threat to the chain appears to be that it might fall out of compliance with a credit agreement by September 30; it is working to change the terms of the loan, but without assistance it could be forced to pay both credit lines immediately.