American Apparel says it expects to report a loss and sales decline for 2010
Los Angeles clothing company American Apparel said in a regulatory filing Thursday that it would not be able to file its annual 10-K report on time and said it expected to report a sales decline and loss for the year that ended Dec. 31.
The company, which has missed filing deadlines several times in the last year, said the abrupt resignation of Deloitte & Touche as its auditing firm last year was the reason for the delay. In the filing with the Securities and Exchange Commission, the company said it couldn't file the report for 2010 "without unreasonable effort and expense."
American Apparel said it expected to report a sales decrease for 2010 compared with the year before, primarily because of a decline in sales at stores open at least a year, known as comparable-store sales, and because of fewer stores (the company operated 273 stores on Dec. 31, eight fewer than a year earlier).
The company also said it expected to report a loss in 2010 "primarily as a result of declines in comparable-store sales, higher production costs, higher operating costs and an
increase in interest expense."
American Apparel made headlines this month after a former employee filed a sexual harassment lawsuit against founder and Chief Executive Dov Charney. The company has denied the charges and said it viewed the $250-million suit as an extortion attempt.
-- Andrea Chang