Troubled US retailer American Apparel has warned of “substantial doubt” that it will be able to continue trading beyond the next 12 months, as sales fell 17.2% to $134m (£86m) in the second quarter.
The company said the decline “was attributable to the lack of new style introduction for the spring and summer selling season”. It also blamed store closures and unfavourable currency exchange rates.
Its net loss grew to $19.4m (£12.4m) in the three months to June 30, up from $16.2m (£10.3m) in the same period last year.
At 30 June, the company had just $6.9m (£4.4m) in cash remaining to fund ongoing operations.
“We believe that we may not have sufficient liquidity necessary to sustain operations for the next 12 months,” the company said.
In July, American Apparel announced plans to close underperforming stores and cut jobs in order to make savings of $30m (£19.4m) over the next 18 months. It is not known if any of its stores in the UK will be affected.
Founder and former chief executive Dov Charney is suing American Apparel after he was fired in June last year.