Multiple media reports Tuesday revealed that Jim Tucker and Richard Beard of KPMG had been appointed joint administrators of the Los Angeles-based company’s British business, putting 13 stores and their employees at risk.
It’s been nine months since American Apparel emerged from Chapter 11 bankruptcy proceedings in the U.S., but its troubles are far from over. The company—excluding its U.K. and European operations—is currently up for sale and Paula Schneider, who took over as chief executive after controversial founder Dov Charney was ousted in January 2015, stepped down from the position in September.
A statement from Tucker, quoted by the Financial Times, blamed “strong retail headwinds” that had led to the U.S. company’s decision to stop inventory shipments to the U.K., where the business was experiencing similar difficulties.
“The 13 U.K. stores are well stocked and will continue to trade as usual in the lead up to the peak Christmas trading period,” Tucker said. “Whilst the U.K. business is not part of the U.S. sale, a number of the U.K. stores are in prime high street locations, and we will also aim to sell individual stores following the Christmas trading peak.”
Founded by Charney in 1989 and worth nearly $1 billion at its peak in late 2007, American Apparel hasn’t turned a profit since 2009. Its struggles are ongoing, despite Schneider’s best efforts to clean up the retailer’s risqué image and undo the damage caused by Charney, the subject of several sexual harassment lawsuits over the years.
Most of American Apparel’s U.K. stores are in London. It also has outposts in Brighton, Bristol, Glasgow, Leeds and Nottingham.