American Apparel is actively seeking a buyer as it prepares for its second bankruptcy.
According to a company source, American Apparel re-engaged talks with potential bidders after its bankruptcy sale negotiations with Authentic Brands Group LLC ceased earlier this week, Reuters reported.
The source said that the troubled retailer is in talks with other interested parties, including brand licensor Sequential Brands Group Inc and financial services company B. Riley Financial Inc. to secure a bankruptcy sale.
Should a buyer act on American Apparel, it would avoid millions in liability fees, including leases for approximately 140 stores in North America. Furthermore, the company would potentially relocate its factories outside of the Los Angeles area, to reduce costs and keep up with its “Made in USA” initiatives.
Despite its talks with the two potential bidders, American Apparel is still interested in negotiating a deal with Authentic Brands Group. If American Apparel does not find a buyer, it will file for bankruptcy again and enter into another sales process, sources said.
Although American Apparel emerged from Chapter 11 bankruptcy in February, the brand is still experiencing major financial woes in the U.S. as well as with its international locations.
On Tuesday, KPMG’s Jim Tucker and Richard Beard were appointed joint administrators of American Apparel’s U.K. business, putting 13 stores and their employees at risk.
In addition, Ireland’s High Court appointed a provisional liquidator to American Apparel’s Dublin city center store Wednesday. KPMG insolvency practitioner Kiernan Wallace will oversee the location, manage the company’s stock and secure its assets.