American Apparel announced the launch of a structuring plan to cut costs and may still need to find additional funding. The struggling retailer, which is being sued by founder and former CEO Dov Charney—and in turn, countersuing Charney—will need to close stores, cut jobs and reduce costs by about $30 million over the next 18 months.
Even under the plan, the company does not know if it will have sufficient funds for the next year without additional capital, Reuters reported.
American Apparel has reported financial losses for the last five years due, in large part, to an ongoing battle with Charney, who was ousted in June of 2014 for allegedly misusing company funds and employee misconduct.
In total, the retailer is facing about 20 lawsuits from shareholders and Charney himself.
The company's reinvention will include new merchandise and a fall line focused on basic clothing items. The strategic move is part of a larger turnaround plan, led by new CEO Paula Schneider, who took over the company at the beginning of the year.
-See this Reuters article
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