American Apparel Q1 net loss widens

Los Angeles – Net loss at American Apparel Inc. grew to $26.4 million in the first quarter of fiscal 2015, from $5.5 million the same quarter a year earlier. Increased cost of sales and foreign currency translation, as well as legal, litigation and consulting costs related to the termination of founder/CEO Dov Chaney, helped boost net loss.



Net sales dropped 9% to $124.26 million from $137.1 million. Impact from foreign exchange and store closures contributed to the reduction in sales. Same-store sales fell 5%. Negatively impacting same-store sales was a strategic initiative to reduce inventory levels by accelerating the sale of slow-moving merchandise. This initiative shifted the merchandise mix in the retail and online stores toward clearance-related product.



During the quarter, American Apparel implemented the initial phase of a multi-year strategic turnaround plan designed to improve operating and financial results over the long-term. Key areas of focus under the plan include infrastructure, operational and financial planning, expense control, design/product development, retail store productivity, e-commerce and wholesale optimization, e-commerce analytics, speed-to-market, and brand building.



“American Apparel is an iconic brand with a loyal customer following and tremendous global brand awareness,” said Paula Schneider, CEO. “The new executive management team and board of directors is committed to driving shareholder value.”