American Apparel’s Restarting After Traveling the Road to Bankruptcy

Executive Summary

• Despite its controversial advertisements and the scandals surrounding its founder and former CEO, in the end, what matters for American Apparel is customer demand.
• On August 17, 2015, the company reported that it had experienced its 10th consecutive quarterly loss in the second quarter, with sales falling 17%.
• The company subsequently filed for bankruptcy on October 5, which will lighten its debt load and let its new management team begin the company’s turnaround.