Struggling US fashion chain American Apparel is reported to have been approached by a private equity firm offering to refinance its debt.
According to reports, the beleaguered retailer has 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.
However, American Apparel founder Dov Charney, who holds a 47.1% stake in the company, is reported to be reluctant to put the company’s brand name and intellectual property at risk. Charney declined to comment.
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).
Leonard Green & Partners current retail investments include US-based businesses J Crew, Neiman Marcus Group, Sports Authority, Tourneau and David’s Bridal.