Main | Thursday, August 19, 2010

American Apparel Stock Value Plummets Amidst Talk Of Bankruptcy

American Apparel's stock value is plummeting upon news earlier this week that the company may be forced into bankruptcy over its vanishing credit line with vendors.
After warning this week that there was "substantial doubt that the company will be able to continue as a going concern," the company saw its stock fall 21.3% on Wednesday, ending at an all-time low of 81 cents. That was on the heels of a 26% plunge the day before. In recent months, the troubled company has been beset by sales declines, losses, a crackdown on undocumented workers, problems with its debt, delayed quarterly filings and, most recently, an investigation by the U.S. attorney's office in New York related to the company's abrupt change in accounting firms. Industry experts say the company's problems are so severe that nothing short of a major overhaul in its business practices and management, which could include a possible bankruptcy filing, can pull it out of its free fall.
Some analysts contend that the company could only be saved with the removal of mercurial CEO Dov Charney, who has also faced numerous sexual harassment allegations from staffers.

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