American Apparel has hired KPMG to act as administrator for the firm’s retail and wholesale businesses in the U.K.
The news follows a report Nov. 7 by WWD that shipments to American Apparel’s European business, which is set up as a separate legal entity from the U.K. and includes companies such as Germany, Italy and Spain, had been stopped Nov. 5 and that a bankruptcy was being explored.
KPMG’s Jim Tucker and Richard Beard were appointed to oversee the wind down of the American Apparel (U.K.) Ltd. and American Apparel (Carnaby) Ltd. operations Tuesday.
The U.K. business totals 13 stores on Carnaby Street, Covent Garden, Westfield White City, Westfield Stratford, Shoreditch, Oxford Street, Kensington High Street and Camden High Street in London. The U.K. business also operates in Brighton, Nottingham, Bristol, Glasgow and Leeds.
“The 13 U.K. stores are well stocked and will continue to trade as usual in the lead up to the peak Christmas trading period,” Tucker said in a statement. “Whilst the U.K. business is not part of the U.S. sale, a number of the U.K. stores are in prime high street locations, and we will also aim to sell individual stores following the Christmas trading peak.”
An American Apparel spokeswoman declined comment on the U.K. news.
American Apparel put itself on the sales block earlier this year and Nov. 7 warned U.S. employees in a letter from chief human resources offer Craig Simmons that the buyer would likely “not wish to continue manufacturing operations or to maintain corporate operations that support the company’s manufacturing, wholesale or retail divisions.”
Such a move could lead to the company winding down operations at its downtown Los Angeles factory and headquarters and shuttering it within 60 days from the notice’s date, the letter said.
Meanwhile, American Apparel, which filed for bankruptcy about a year ago, continues to see its case wind through the system with a hearing today on several matters, including motions filed by the litigation trustee and restructuring firm FTI Consulting. The trustee and FTI each filed their own motions to have a judge enforce the company’s confirmation plan, paying out $2.5 million to the unsecured creditors committee and $2 million in unpaid fees to FTI.