The New York Stock Exchange Friday warned American Apparel that it hasn’t met its listing standards, according to a filing with the Securities and Exchange Commission. The warning compels the company to outline a plan to regain compliance, due Oct. 9.
Shares of the company, which is also reportedly having trouble paying some bills, are at about $.16 each. The company also faced delisting last year.
Meanwhile, the retailer’s former president of wholesale, Pat Honda, filed a suit in Los Angeles alleging discrimination, breach of contract, and wrongful termination, among other claims, seeking $1 million in damages, plus lost compensation.
American Apparel had been contending with mounting losses even before last year’s boardroom drama, which culminated in the ouster of founder-CEO Dov Charney. But the change of leadership, marketing, and merchandise so far hasn’t done much to right the ship. Plus, the drama has continued, with Charney and others (including now Honda) suing the company for wrongful termination and other complaints, workers staging protests against layoffs and work conditions, and mounting debt.
Things aren’t looking good, to say the least, but the problems go beyond the company’s dire financial straits and the ongoing litigation. It’s also unclear whether there’s much point to American Apparel without the spirit Dov Charney brought the brand, including its style and swagger (and even its grubby tastelessness).