Dov Charney Still Thinks He Can Save American Apparel, Even If The Stock Is Worthless
12:03 pm, June 20th | by Hillary Reinsberg
Time will tell if Dov Charney has in it him to save American Apparel. Of course, it certainly doesn’t help that the hip fashion label has been knee-deep in mostly unsolved financial trouble for the past few months and is on the brink of dissolving.
And, at today’s shareholder meeting, we’ll find out if Charney will get approved to keep the company together at all. Even if he gets the go-ahead, there’s no saying where the money will come from. Sounds like a pretty big mess, huh?
The company already got $15 million private investment, which Charney allegedly managed to blow through rather quickly. Now, Charney’s trying to get shareholders to approve another $25 million bailout to get out of the gutter.
There just happens to be a little problem with this: American Apparel stock is, well, worth virtually nothing at the moment. Shares have been below $1 for the last week, and have even dipped below 90 cents, according to The New York Post. Right now they’re floating between 90 cents and a dollar. So, it’s pretty unclear where in the world that $25 million would come from.
Some argue that Charney actually has a shot at keeping it together, pointing to some positive cash flow in the last few months and successful sales in New York stores. Positive cash flow? Well, when you get $15 million – and manage to blow through it – we’d sure hope you have some positive cash flow.
At this point, we’re forced to ask: Which summer has been more humiliating for Charney? 2010, the summer of embarrassing leaked employee guides and questionable hiring policies… or 2011, the summer of… this?