American Apparel warns of bankruptcy
April 1, 2011 02:08 PM
Online sales declined last year for American Apparel Inc., which is also dealing with an ongoing financial crisis and possible bankruptcy.
For the year ended Dec. 31, Amercian Apparel, No. 269 in the Internet Retailer Top 500 Guide, reported:
- Web sales, which include the U.S. and international, declined 4.8% to $35.5 million from $37.3 million in 2009.
- Total sales declined 4.6% to $533.0 million from $558.8 million in 2009.
- Retail sales decreased year over year 8.7% to $346.4 million from $379.4 million.
- Comparable-store sales declined 13.4%.
- Net loss was $86.3 million compared to net income of $1.1 million in 2009.
Internet Retailer calculates the web accounted for 6.7% of total sales compared with 6.7% in 2009.
American Apparel encountered a host of problems in 2010 that put a severe strain on the company’s finances and ability to fund continuing operations. The retailer was hit with higher raw materials costs, labor disruption from an ongoing immigration-related investigation, key management turnover and financing problems.
In the wake of an ongoing financial crisis, American Apparel warns it may yet file for Chapter 11 bankruptcy protection. “If we are not able to timely, successfully or efficiently implement the strategies that we are pursuing to improve our operating performance and financial position, obtain alternative sources of capital or otherwise meet our liquidity needs, we may need to voluntarily seek protection under Chapter 11 of the U.S. bankruptcy code,” the retailer says in its just-filed annual report with the U.S. Securities and Exchange Commission. “There can be no assurance that our plan to improve our operating performance and financial position will be successful or that we will be able to obtain additional financing on commercially reasonable terms or at all.”
For the fourth quarter:
- Web sales, which include the U.S. and international, declined 4.4% to $10.9 million from $11.4 million in 2009.
- Total sales declined 9.0% to $143.9 million from $158.1 million in Q4 2009.
- Retail sales decreased year over year 10.4% to $96.9 million from $108.2 million.
- Comparable-store sales declined 11.5%
- Net loss was $19.3 million compared to net income of $3 million in Q4 2009.
Internet Retailer calculates the web accounted for 7.6% of total sales compared with 7.2% in Q4 2009.