Los Angeles—Retailer in bankruptcy American Apparel Inc. reported Tuesday a narrowed loss in preliminary results for the third quarter.
American Apparel said that it couldn’t meet the deadline to file a quarterly report for the three months ended Sept. 30.
Initial results reflect show that the specialty retailer has a long road ahead to return to profitability.
Net sales plunged 19.1% to $126 million, down from $155.9 million in the same period a year earlier.
Deal with Creditors
Share price for American Apparel, which was at 11 cents before the bankruptcy filing, has fallen so low that it changed the financial effect of warrants, which give investors the right to buy stock at a certain price. That helped reduce the net loss to $18.8 million from $19.1 million in the year-earlier quarter.
The retailer filed for Chapter 11 bankruptcy protection after reaching a deal with 95% of its secured lenders. Meanwhile CEO Paula Schneider—who replaced ousted CEO Dov Charney–has been trying to implement a turnaround plan since earlier this year.
The restructuring agreement will take the company private and give nearly 100% control to its largest bondholders, a plan designed to reduce its huge debt load and interest payments.
If approved by the Bankruptcy Court, the deal would also force out most of American Apparel’s shareholders, including Charney. He is the company’s largest shareholder, with about 43% of the stock.