American Apparel hires investment bank to explore sale: sources

Wed Aug 17, 2016 6:31pm EDT
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By Lauren Hirsch and Jessica DiNapoli

(Reuters) - American Apparel LLC, the U.S. teen clothing retailer known for its sexually suggestive advertising, has hired investment bank Houlihan Lokey Inc to explore a sale, people familiar with the matter said on Wednesday.

The sale process comes just six months after American Apparel emerged from Chapter 11 bankruptcy, following the public ouster of its controversial founder and chief executive officer, Dov Charney, and a string of losses that the company has struggled to reverse.

The sources asked not to be identified because the sale process is confidential.

"As we have regularly communicated to employees, vendors and customers, we continuously evaluate strategic alternatives," American Apparel, which is now owned by its former creditors, said in a statement.

When contacted for comment, Charney said he would have to see what the asking price for his old company is before considering making a bid. He added that he is working on setting up a new apparel company.

Charney, with support from investors that included Hagan Capital Group and Silver Creek Capital Partners, had mounted an unsuccessful $300 million bid for American Apparel in January.

Houlihan Lokey declined to comment.

Charney was fired as CEO of American Apparel in 2014. The company cited inappropriate behavior and misuse of company funds.   Continued...

An American Apparel store logo is pictured on a building along the Lincoln Road Mall in Miami Beach, Florida March 17, 2016. REUTERS/Carlo Allegri