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Teen clothing retailer on brink of going bust

American Apparel is nearly out of options when it comes to financial solvency and has warned its shareholders of potential doom.

August 12, 2015

American Apparel could be out of money within the next year, after five years of losses, according to a Reuters report.

The teen clothing retailer, based in Los Angeles, California, has seen its market value tank from $540 million in 2010 to $90 million this year, with its stock crashing 80 percent this year and currently at 20 cents a share.

In a regulatory filing, the struggling company warned shareholders that they may lose their investments due to the challenges of trying to raise more capital. In regard to second-quarter financials, the outlook doesn’t get any brighter, as the retailer predicts a 17-percent decline in revenue compared to 2014 — despite a corporate revamp that included shuttering stores and laying off workers.