American Apparel calls in administrators to UK business

By

Sandra Halliday

Published
Nov 8, 2016

Americal Apparel has called in administrators for its UK business with Jim Tucker and Richard Beard of KPMG set to oversee the wind down of the British retail and wholesale operations after the Christmas trading period.

The move has not come as a surprise with speculation rife that neither the UK operations nor the separate European business would be part of the sale of the US firm that is currently on-going. KPMG said closure is the most likely option for the 13 UK stores.

Jim Tucker said in a statement: "The American Apparel group has been experiencing strong retail headwinds, which has culminated in the US parent deciding to stop inventory shipments to the UK. The UK business has experienced similar trading difficulties, resulting in the appointment of administrators.

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"The 13 UK stores are well stocked and will continue to trade as usual in the lead up to the peak Christmas trading period. Whilst the UK business is not part of the US sale, a number of the UK stores are in prime high street locations, and we will also aim to sell individual stores following the Christmas trading peak."

No redundancies have been announced for the period while the stores are still trading.

The announcement brings to an end heavy speculation about the prospects for the UK arm and is likely to mean a similar wind down process for the European ops, with inventory shipments to Europe having ceased at the end of last week. Aside from the 13 UK stores, the European operation has around 30 stores.

American Apparel in the US is currently mulling offers from several potential buyers with Iconix Brand Group and Authentic Brands Group having been suggested as two firms that could be interested.

American Apparel has seen a number of turbulent years following founder Doc Charney’s firing in 2014. Charney later tried to buy the business back and claimed that when he left, the overseas units were all profitable on an Ebitda basis.