Investors at struggling US fashion chain American Apparel are reportedly looking to sell off shares in the retailer just four months after providing $15m (£9.2m) to help American Apparel avoid bankruptcy.
A group of private investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital are looking to sell 43.3 million shares of the company. The shares reportedly represent around 40% of American Apparel’s outstanding stock.
The sale would be a secondary offering, meaning that the retailer would not receive any proceeds from the sale of the shares.
The beleaguered retailer may have to file for bankruptcy if it does not generate enough money to keep going and has been struggling with a slump in sales.
At the beginning of August, the retailer said it had narrowed its losses for the three months ended June 30 as losses fell to $213,000 (£130,000), down from $14.7m (£8.98m) in the same period a year earlier. Sales increased slightly to $132.8m (£81.3m) up from $132.7m (£81.2m).
Earlier this week it was reported that American Apparel had been approached by a private equity firm offering to refinance its debt. According to reports the retailer had been offered a $100m (£61.3m) loan by private equity firm Leonard & Green Partners for it’s name and intellectual property, which it could use to pay off the $83.8m (£51.4m) which it owes to London-based private equity firm Lion Capital.