American Apparel's new investors looking to sell shares
A group of Canadian investors is looking to sell its shares in American Apparel Inc. just four months after throwing the Los Angeles clothing company a much-needed financial lifeline.
American Apparel said in a regulatory filing that the group, led by Canadian financier Michael Serruya, could sell up to 43.2 million shares of common stock on the secondary market.
"We do not know when or in what amount the selling stockholders may offer the shares for sale," American Apparel said in the filing.
In April, the investors agreed to pump $15 million in equity at 90 cents a share into the company. They also are got warrants to buy an additional $30 million worth of shares over a six-month period at the same price.
American Apparel in recent years has struggled with slumping sales and profits, although company executives say things are slowly improving. For the quarter ended June 30, the company reported a loss of $213,000, or flat earnings per share, compared with a loss of $14.7 million, or 21 cents, in the year-earlier period.
Sales were flat overall and at stores open at least a year. Chief Executive Dov Charney said sales trends were improving, with same-store sales up 3% in June and 4% in July. Second-quarter online sales rose 23%.
American Apparel shares rose 4 cents, or 4.3%, to 97 cents Tuesday. They are down 43% year to date.
-- Andrea Chang
Photo: An American Apparel store. Credit: Lawrence K. Ho / Los Angeles Times