Los Angeles-based American Apparel Inc. continues to pare back expenses in an aim to stay afloat.
The company said in a filing with the Securities and Exchange Commission Friday that it amended its lease on two buildings in downtown Los Angeles, where its headquarters are, to reduce its rent and will empty one 400,000-square-foot building it said is underutilized and does not house any manufacturing or distribution. American Apparel is expected to leave the building by March 31.
The move is expected to reduce annual rent by $2.1 million, the company said in its SEC filing.
Headquarters and manufacturing will remain in the second, 400,000-square-foot facility in downtown.
The actual lease amendment with landlord Alameda Square Owner LLC cuts rent in half beginning April 1, and reduces rent, fees, interest and other items incurred last year to $1.8 million from $2.99 million.
The filing comes amid uncertainty about the company’s business and reports that bankruptcy could be looming.
American Apparel earlier this month revealed new steps in its turnaround strategy that included a revamped fall line and a $30 million plan to reduce expenses. Even with those measures, it warned “there can be no guarantee that the company will have sufficient financing commitments to meet funding requirements for the next 12 months without raising additional capital, and there can be no guarantee that it will be able to raise such additional capital.”
The company’s shares closed down slightly Friday to 22 cents for a market value of $39.42 million.