American Apparel's struggles continue

Trendy teen retailer American Apparel reported a deep decline in fourth quarter revenue, as the company grapples with a social media scandal and losses stemming from an investigation of its former CEO.

The retailer posted a loss in the fourth quarter of $28 million, or 16 cents a share, compared with $20.8 million, or 19 cents a share, a year earlier.Revenue fell to $153.5 million from $169.1 million.The results included a charge of about $1.2 million from employment settlements. Inventory fell 13% to $21.8 million.

CEO Paula Schneider said: "Our fourth quarter year-over-year growth in adjusted EBITDA and reduction in operating expenses position us for a solid turnaround of this business. We remain focused on putting the right processes and systems in place-such as a rigorous forecasting process and disciplined bottom-up budgeting-so that we can better leverage American Apparel's strong brand."

American Apparel said it took a $3.8 million charge in the quarter related to an internal investigation of former Chief Executive Dov Charney, who has said he plans to file a $40 employment lawsuit.

This week an internal email leaked on the Internet detailing the company's plan to hire real models — not "Instagram hoes or thots," moving forward. The term "thot" is an Internet slang acronym for "that ho overthere."