The saga continues over at American Apparel.
The good news: The US-made label hasn't thrown in the towel yet. In fact, despite being in the dire financial straits, the company's still expanding its retail efforts, with a new store having just opened in Paris two weeks ago, and another scheduled to open in St. John's, Newfoundland next week, WWD reports. Furthermore, American Apparel's lender, Lion Capital, recently relaxed its loan agreement which had previously stated that the company had to keep its earnings above a certain level through the end of 2010. And perhaps the best news—at least for American Apparel's founder, Dov Charney: despite the controversy surrounding his business know-how of late, the CEO received a vote of confidence from Lion, meaning he'll most likely continue to lead the company as it tries to climb itself out of the financial gutter.
The bad news: Despite the amendment to Lion's loan deal with American Apparel, the brand still has to show earnings of at least $20 million dollars for 2010, and more importantly, a drastic increase in profitability (up to $80 million by September 2013) over the next three years. Furthermore the company still has to get its accounting and numbers straightened out in time to submit its overdue second-quarter earnings report to the New York Stock Exchange (NYSE Amex LLC) to avoid being delisted. And perhaps the worst news—at least for Charney: even with his vote of confidence, Lion will still be bringing in new senior executives to work under him, likely signalling a grimmer, more business-focused mindset around the office. Something tells us these new execs won't be so keen on attending meetings with him in his underwear.