Wednesday, August 13 08:27:20
Struggling apparel retailer American Apparel Inc posted a bigger-than-expected quarterly loss as sales stagnate amid a corporate shakeup that started with the suspension of founder Dov Charney as chief executive.
The company, which is still looking for a replacement for Charney, said in a preliminary filing its net loss for the second quarter ended June 30 was $15 million, or 9 cents per share.
Sales, which fell in the last two quarters, were flat at $162 million.
Analysts on average had expected a loss of 6 cents per share on sales of $162.5 million, according to Thomson Reuters I/B/E/S.
The company said on Tuesday it was delaying filing its full financial results as its new board needed additional time to review them. (http://1.usa.gov/1rnS33o)
American Apparel, known for its U.S.-made, logo-free and comfort-oriented clothes, has posted losses in almost every quarter in the last four years, coming under fire for lax financial controls.
Charney was ousted from the company in June for alleged misuse of corporate funds and his role in disseminating nude photos of an ex-employee.
He is currently under investigation and, as part of the deal, will not be allowed to serve on the board or be chief executive until a committee of independent directors clears him.
American Apparel appointed five new board members earlier this month after five of its seven directors resigned on July 9.
Reuters reported last month citing a source that Charney should know by mid-August whether he may return as an employee of the company.
The company's shares, traded on the American Stock Exchange, lost more than half their value in the past year up to Tuesday's closing of 90 cents. (Reuters)
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