An investor allied with American Apparel founder and ousted CEO Dov Charney has offered more than $200 million in a bid to take over the struggling retailer, an amount that fits within the value range (between $180 million and $270 million) that the investment bank assessing potential bids has estimated in court documents.
The retailer is working out its reorganization in bankruptcy court at the moment, so any deal is complicated. The Charney-affiliated offer would need to be accepted by the company and its creditors. Failing that, the investor could attempt to persuade the judge overseeing the bankruptcy not to go forward with the retailer’s bankruptcy plan.
American Apparel would only say in an emailed statement that "American Apparel evaluates all bids consistently, and in the ordinary course. The company remains focused on pursuing the completion of its financial restructuring following its planned bankruptcy court hearing at the end of this month.”
Sources close to Charney have said for weeks that if financial backing could come through, the founder could come close to returning to the company in some capacity. Certainly Charney has not gone quietly from the start, fighting the retailer in court, often over the steps the board took to achieve his ouster.
American Apparel, for its part, is in a tough spot, and not just financially. While the retailer has to regain its financial footing, it must also get back some of its previous allure—an edgy streetwear vibe that was largely stoked by Charney’s vision. So far, CEO Paula Schneider and her team haven't come up with anything remotely daring or even piquant enough to take the place of any of that.
If, however, Charney can turn the page on the creepy-sex reputation that wasn’t helped by the accusations that surfaced at the time of his departure—a big if—and get back to what Jack Kerouac, describing Robert Frank’s street photography, said is "that crazy feeling in America when the sun is hot on the streets and the music comes out of the jukebox,” the retailer could possibly get its groove back.