American Apparel to close stores, lay off workers to save $30 million
Article continues below
The company faces nearly two dozen lawsuits from ex CEO Dov Charney.
"Historically, the fall season has not been a major focus for the Company. We are beginning the process of re-merchandising the product assortment in our retail stores to increase productivity by SKU," said Paula Schneider, recently appointed chief executive officer of American Apparel.
"The new styles are designed to increase revenue as we continue to evolve our product offering during this important selling season," added Ms. Schneider.
In addition, the company is undertaking a series of cost reduction initiatives to better align its cost structure with the headwinds of today's highly competitive, promotional retail environment and volatile foreign exchange markets.
These initiatives are expected to reduce operating expenses by approximately $30 million over the next 18 months. Among other initiatives, cost-cutting measures will include closing underperforming retail locations to drive productivity improvements.
In connection with these store closures, the company will streamline its workforce to reflect a smaller store footprint and general industry conditions. Going forward, the company will look to add new stores in profitable fast-growing territories while reducing its footprint in unprofitable and over-saturated markets.
The company faces nearly two dozen lawsuits from ousted CEO Dov Charney. ■