American Apparel Inc. narrowed its losses in the second quarter, just about breaking even as sales inched up.
This story first appeared in the August 9, 2011 issue of WWD. Subscribe Today.
The firm’s losses shrank to $213,000, or zero cents a share, from $14.7 million, or 21 cents, a year earlier. Sales for the three months ended June 30 inched up to $132.8 million from $132.7 million. Comparable-store sales were flat for the quarter, but the trend improved as the period progressed, with comps rising 3 percent in June and 4 percent in July.
“During the month of July we received $8.3 million in new capital in connection with share purchase transactions consummated in April 2011,” said Dov Charney, chairman and chief executive officer. “To date, we have received $22.5 million in gross proceeds for the sale of shares and exercise of purchase rights in connection with these transactions. This additional capital will allow us to take advantage of improving business conditions in order to build upon our recent successes. Together with our improved operating performance, this new capital makes us well positioned to strengthen our balance sheet.”
In April, a group of investors led by Toronto-based Michael Serruya threw American Apparel a financial lifeline, investing an initial $15 million in the firm.
The company plans to launch an e-commerce shop on eBay in September as part of efforts to expand distribution beyond its own stores.