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American Apparel Files For Bankruptcy

The troubled apparel retailer filed for bankruptcy protection, saying it's reached a restructuring agreement with 95 percent of its secured lenders.
Image: American Apparel Suffers For Profit Losses And Company Turmoil
An American Apparel store is seen on August 19, 2015 in New York City. The youth clothing retailer has filed for bankruptcy protection. Spencer Platt / Getty Images

Troubled teen apparel retailer American Apparel Inc filed for bankruptcy protection on Monday and said it had reached a restructuring support agreement with 95 percent of its secured lenders.

"This restructuring will enable American Apparel to become a stronger, more vibrant company," Chief Executive Paula Schneider said in a statement.

Image: FILE: American Apparel Receives Federal Subpoena Amid Accounting Inquiry
Shares of American Apparel have fallen 67 percent this year.Spencer Platt / Getty Images

The company listed assets and liabilities of between $100 million and $500 million in its bankruptcy filing.

"By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy," Schneider added.

Teen apparel retailers are struggling as customers switch to fast-fashion brands such as H&M , Forever 21 and Inditex's Zara and online retailers such as Inc that offer deep discounts.

Companies such as Wet Seal, Cache Inc , Deb Shops, Delia*s and Body Central Corp have filed for bankruptcy in the last year.

American Apparel, founded in 1989 by Dov Charney whose 'Made in America' mantra found huge favor among young shoppers, has been in disarray after it fired him in December for alleged misconduct.

Charney has since filed several lawsuits against the company, alleging defamation, representation in false light and claims for securities fraud.