Preliminary estimates for American Apparel’s third quarter aren’t much of a surprise. They don’t look good.
The Los Angeles-based apparel maker and retailer said in a filing with the Securities and Exchange Commission Tuesday that efforts on the company’s bankruptcy, announced last month, have taken up most of executives’ time causing the company to not meet the deadline for reporting its quarterly results.
Still, American Apparel managed to put together estimates on its performance in the filing.
Third-quarter net sales were off 19 percent from the year-ago period to $126.1 million. The company cited pressures from same-store sales declines, store closings and exchange rates as the reason for the decline. American Apparel had been looking to rid itself of excess inventory since ceo Paula Schneider came on board. But the fire sales only helped to tamp down on store performance, causing the decline in comparable sales.
The company’s net loss for the quarter narrowed slightly from $19.18 million a year earlier to $18.76 million in the recently ended quarter.
Sales for the first nine months of the year slumped 16 percent from a year ago to an estimated $384.7 million. The company’s net loss for the nine-month period widened to $64.54 million, compared to $40.86 million a year earlier.
It’s little to show for the turnaround strategy rolled our earlier this year under Schneider who, in an interview with WWD earlier this year, likened her job to “very much drinking from a fire hose,” having to implement policies, procedures and an internal structure before embarking on tactics to improve the business.
Meantime, bankruptcy proceedings continue for the battered company. American Apparel filed for Chapter 11 protection in October after a tumultuous period with the business that was coupled with the public drama that has been playing out since the ouster of founder and former ceo Dov Charney late last year. Charney has contended in a number of lawsuits that have since been lodged against the company, former board members and New York hedge fund Standard General that his firing was part of a scheme to rid American Apparel of him so that it could be sold.