American Apparel (APP) to Cut Hours at LA Factory: Report

American Apparel

Cash-strapped American Apparel Inc. (APP) is planning to slash hours at its Los Angeles factory to conserve funds, reports the New York Post. The slowdown could result in “sharply reduced hours and weeks off” for thousands of the retailers garment workers, according to sources.

“This is a disaster for a brand that has prided itself as an example of the possibilities of manufacturing in the US,” one investor close to the company told the publication.

On Sunday, Reuters reported that British buyout firm Lion Capital sent a letter to American Apparel’s board, requesting the retailer consider strategic options, including a potential sale.

Irving Place Capital has alredy put in a bid for the APP for up to $1.40 a share, an offer the Los Angeles-based company believes is far too low. The retailer thinks any takeover offer should be “several multiples” higher.

On valuation measures, American Apparel has a PEG of (0.06). Price/Sales is 0.30 while EPS is ($0.43). T-12 profit margin prints (9.87%). For its most recent quarter the name’s balance sheet shows $9.38 million in cash vs a total debt of $252.77 million. APP has a price consensus estimate of $1.25.

In the past 52 weeks, shares of  American Apparel have traded between a low of $0.46 and a high of $1.45 and are now at $1.06. APP is down 11.67% year-over-year and 13.82% year-to-date. Ticker had a market capitalisation of $185.27 Million as of Friday’s close.

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About Ron Haruni 1067 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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