Struggling teen clothing retailer American Apparel is closing underperforming stores and plans to raise more capital in the next 12 months as part of a new restructuring plan aimed at cutting costs.
The current board of directors at American Apparel plan to cut costs by approximately $30 million over the next 18 months. To reach their goal they will cut jobs and close underperforming stores.
While the company will close stores that are failing to attract customers, American Apparel said it will look to add new stores in profitable fast-growing territories. The company expects its restructuring initiatives to reduce operating expenses in low profit geographics, while generating increasing profits.
The company has also announced plans for a completely redesigned fall merchandise line, and key additions to its leadership team.
The fashion retailer is currently being sued by its founder and former CEO Dov Charney after he was removed from his position by his own board of directors. The defamation lawsuit is seeking more than $20 million in damages.