American Apparel may be headed for second bankruptcy filing

Los Angeles - For the second time in the span of two years, it seems that American Apparel may be headed for bankruptcy. As reported by Bloomberg, the Los Angeles-based retailer may already be preparing for its second bankruptcy filing.

The company exited bankruptcy earlier this year as of February. Through this, the company was able to restructure as a new private company under chief executive officer Paula Schneider. American Apparel had started a turnaround plan to lead the brand to success, which included converting 230 million dollars of bonds into equity in the company. However, it seems that the retailer is still struggling financially.

The Los Angeles apparel company also hired investment bank Houlihan Lokey earlier this year. This proved that the company may be seeking buyers in the near future. As reported by Reuters, Authentic Brands Group LLC, Iconix Brand Group Inc., and others may be interested in buying American Apparel. “Negotiations could lead to American Apparel filing for bankruptcy for the second time in as many years,” Reuters reported.

The filing has not yet been publicly confirmed by the basics apparel company. At this time, there is not set date for the filing either. FashionUnited has reached out to American Apparel, yet at the moment the company has not yet responded.