American Apparel appoints administrators to its UK stores

Tue, 08 Nov 2016 | ADMINISTRATION

The UK division of American Apparel has appointed KPMG as administrators, with the likely result of the closure of most of its stores.

The troubled US retailer was bought out from Chapter 11 bankruptcy earlier this year by its creditors and bondholders, though this sale did not include the UK and European operations. The company had run into problems in 2015 as it struggled to settle loan payments and pay off legal bills relating to the ousting of its former CEO Dov Charney.

The thirteen UK stores are likely to continue trading through Christmas, but will shut early in 2017. Some of the branches occupy prime high street positions and KPMG has indicated that these are going to be targeted for sale on an individual outlet basis.

Word is that the US company, which is in the midst of a sale to unknown buyers, had decided to stop supplying new inventory to the UK. This was probably brought on by trading and payment difficulties experienced by the British division.

However the UK stores are well-stocked and trading should carry on as normal in the lead-up to Christmas.

The trading environment for many UK high street retailers remains challenging, with the announcement from American Apparel falling hard on the heels of similar announcements. Both Sky and Marks and Spencer are each shutting around 60 stores across the country in the coming months.

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