Dallas, Texas 08/25/2014 (FINANCIALSTRENDS) – American Apparel (NYSEMKT:APP) has been marking progress on the turnaround story for some time now. And analysts suggest that there is definitely positive growth curve, it is yet not clear of the red flags and continues to achieve minimal financial gains.
As with typical turnaround talk, the management has been under various stages of re-arrangement with some exits and new appointments. The highlight of these management upheavals has been the infamous ouster of the Chief Executive Officer.
One of the biggest worries plaguing American Apparel has been the inability to post profits in the past few years. As this year too, quarterly loss was reported, it remained a challenge for the company to find its erstwhile winning ways.
Though, it was found that losses had now been made-up to a higher percentage in comparison to previous quarter, the need before American Apparel (NYSEMKT:APP) currently is to mark the turnaround phase effectively.
Sales in the comp store category have been down in the quarter, the wholesale segment marked great some remarkable growth curve, by an unexpected 9%.
The main problem for this once famous seller of hipsters is its financial standing.
The exited CEO, who was actually the founder of the company, did carry an expensive lay-off package, further placing American apparel in financial mess.
As such this apparel maker is dependent on funding and financial institutions, mainly Standard General, which at last count held 40% of stake.
American Apparel (NYSEMKT:APP) internal auditing pending to establish Charney’s innocence is proving to be an expensive bill to pay as the reputation of the company continues to be battered.
A new member on the board of directors from Google, Laura Lee has been inducted and no replacement in sight for the Chief Executive, the financial results of the apparel maker are yet to be announced.