American Apparel said to receive buyout proposal from Irving Place Capital
20 December 2014
Clothing manufacturer American Apparel Inc yesterday revealed that private equity firm Irving Place Capital has approached it for a possible takeover, The Wall Street Journal reported, citing sources.
The announcement came a day after the New York Post reported that American Apparel founder Dov Charney, who was last week fired by the company, is teaming up with Irving Place to table a bid.
Charney, American Apparel's largest shareholder, with a 43 per cent stake, was sacked from the CEO post by the company's board on allegations of inappropriate sexual conduct with female employees and misusing corporate funds and hired fashion executive Paula Schneider to be its next CEO.
Charney's voting rights on his stake is shared with New York-based hedge fund Standard General, who funded money earlier this year in order to increase his stake.
The company's stock yesterday closed at $1.07, giving it a market cap of $187 million.
American Apparel has posted annual losses since the past three years and three consecutive quarterly losses this year leading to its stock plunging 53 per cent in 2014, according to the report.
Los Angeles-based American Apparel was founded in 1989 by Canadian born Charney. The company is a vertically integrated clothing manufacturer, wholesaler, and retailer.
The company has a head count of 6,000 people in Los Angeles, and an additional 5,000 work at its stores worldwide.