American Apparel Inc (NYSEMKT:APP) disclosed on Monday that it will shut down stores and cut jobs in an effort to trim costs and improve its fortune. The cuts will help the company in saving $30 million, however APP didn’t specified number of stores and jobs that will be affected.
The American clothing manufacturer has a total workforce of about 10,000 and a fleet of 239 retail locations. Chief executive officer at American Apparel, Paula Schneider said that the company is dedicated to improving things. She added that the latest announcement is an essential measure to help the company get used to headwinds in the retail industry, save jobs for the vast majority of our employees, and restore the business to lasting profitability.
American Apparel (APP) also notified that in spite of the cost-cutting moves, it may still need to increase extra capital in the coming twelve months. The company trimmed roughly 180 employees in April mainly in the manufacturing area.
Schneider stated she is focusing to address problems that resulted in high losses over the last five years. The company has experienced over $300 million in losses in that period, largely under former chief executive Dov Charney, who was compelled by the board of directors to leave his position last year. The company remains entangled in a nasty legal fight with its spurned founder, with court cases filed by both sides.
American Apparel’s current CEO has made several changes to the company since she started performing her duties in January. The changes include reforming the management structure of the organization, revamping its marketing policy, and introducing stringent budgeting and forecasting procedures.
The company is also planning to roll out a redesigned clothing line this fall, in an attempt to attract customers back to embattled brand. Schneider said that the new styles are made to boost revenue as American Apparel continues to evolve its product offering throughout this important selling season.
