American Apparel’s U.K. subsidiary is down to a single store on Camden High Street in London after administrators announced the closure of a dozen doors in the region Friday.
The closures represent the loss of 147 jobs, leaving a staff of 31 at the remaining store and the company’s head office for what KPMG said would be for the “short term.”
The majority of the stores were in London with additional locations in Brighton, Bristol, Leeds, Nottingham and Glasgow.
“Over the last seven weeks, we have carried out our intention to trade all of the stores on a short-term basis in order to sell the stock and realize value for the creditors,” said KPMG’s Jim Tucker, who is joint administrator and restructuring partner. “The Camden store will remain open into January.”
KPMG was hired last month to carry out the administration process — akin to U.S. bankruptcy — for the U.K. business and was expected to keep the stores running business as usual during the holiday selling season with the hope of selling off the individual locations.
Administration was a course of action accelerated after the U.S. business stopped sending inventory to the international subsidiaries ahead of its own bankruptcy filing Stateside. The actions by the parent were met with frustration in Germany where some workers have been vocal about the actions and lack of communication from the Los Angeles firm on social media and protests at some stores.
American Apparel LLC, based out of Los Angeles, has largely distanced itself from the international activities, citing laws governing administration that did not give it control of the process.
Meanwhile, the U.S. business received approval from a bankruptcy judge this week to hold store closing sales at nine underperforming stores before shuttering them in what the company expects to yield some $600,000 in gross sales. The stores were not seen as adding any value to a possible sale of the retail business with the company remaining hopeful it can attract a buyer of at least a portion of its fleet of U.S. stores. Any other doors that are not sold in a scheduled bankruptcy auction next month would be shuttered by the end of April.
American Apparel filed for Chapter 11 in the U.S. last month, less than a year after emerging from its first. It is expected to be sold to Canadian T-shirt firm Gildan Activewear Inc. for some $66 million, not counting the retail stores, if it is unable to attract any other bidders to the table.