American Apparel Files For Bankruptcy

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
FILE - OCTOBER 5, 2015: Retailer American Apparel files for bankruptcy pending court approval. NEW YORK - AUGUST 18: An advertisment for an American Apparel retail store is displayed on August 18, 2010 in New York City. Shares of American Apparel have fallen 67 percent this year following news from the casual retailer that it expects a net loss of up to $7 million and that it has received a federal subpoena over its change in accounting firms. (Photo by Spencer Platt/Getty Images) 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.