American Apparel Could Generate $60 Million in Financing
American Apparel, the Los Angeles-based promotional products apparel supplier, could generate up to $60 million in new financing, Financial Times is reporting (registration required). In an interview with the site, CEO Dov Charney said American Apparel had stabilized after reports earlier this year of the company's $86.3 million net loss for 2010 and subsequent board shakeup.
"We are making a lot of progress in the profitability proposition," Charney said.
The company, which received a $15 million investment in April and another $6.7 million in July, is in a position to generate up to $60 million more through three avenues. The investors from April are eligible to exercise stock warrants for another $20 million, and the company could refinance and expand its Bank of America credit line for up to $20 million more. Finally, the company believes $10-$20 million could be freed up through internal management improvements.
Separately, it was reported earlier this month that American Apparel could receive up to $160 million via debt consolidation through a number of private equity firms. Billionaire investor Ron Burkle was rumored to be attached to one of the equity firms in talks with the company.
According to the Financial Times article, the funds would be spent on advertising and on improving its retail presence. The company currently has more than 250 retail stores, and is preparing to open more, with new outlets slated for Hong Kong and Taiwan.