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American Apparel Inc. (NYSEMKT:APP)’s Troubles Deepen

Boston, MA 02/21/2014 (wallstreetpr) – American Apparel Inc. (NYSEMKT:APP)’s troubles are far from over, in fact they appear to be worsening. The company saw an overall decrease in sales in January 2014.

The First Month:

The first month after the holiday season is always tough on retailers as consumers shy away from purchasing. But the figures released by American Apparel Inc. (NYSEMKT:APP) for the month show a depressing trend. There was a decrease of 5% in comparable sales including a 4% drop in the retail store segment and a 6% decrease in the online segment. Total net sales were lower by 1% to $45.5 million, preliminary results indicate. All comparisons are with the same period last year. However, wholesale net sales increased by 7% over the same month last year. If we look at last year, the company had registered a strong growth with an overall increase of 10% over 2012. Even the wholesale segment had registered a 13% growth. The operations of the company cover about 250 retail stores in over 20 countries in North America, Europe as well as some parts of Asia. The ecommerce platform services more than 60 countries. It also supplies casual wear including T-shirts to distributors and screen printers.

Situation Critical?

The decline could also be a result of the extremely cold weather prevailing in some parts of the U.S. The cold weather has been blamed by many traditional retailers for their bad performance in both the last quarter of 2013 as well as the first month of 2014. The situation now appears to be critical at the company as American Apparel Inc. (NYSEMKT:APP) is tapping restructuring experts. The company needs to work on its heavy debt burden as well as weakening sales.

The shares of American Apparel Inc. (NYSEMKT:APP) tanked by more than 32% to close at $0.66. The stock touched the 52-week high of $0.59 but managed to recover slightly.

Published by Christine Lawrence

Christine Lawrence is a financial analyst. She loves analyzing socioeconomic trends in the background of financial moves. She has overall seven years of experience in Auditing, Finance and Writing.

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