American Apparel to File for Chapter 11 Bankruptcy Protection

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American Apparel recently reported a net loss of $19.4 million for last quarter and has said it may go out of business in the near future. (Credit: Spencer Platt/Getty Images)

American Apparel, the trendy but troubled Los Angeles clothier, is preparing to file for Chapter 11 bankruptcy protection Monday — yet another blow to a company that has been struggling since ousting its chief executive last year.

The firm said Sunday that it had reached an agreement with 95% of its secured lenders to implement a financial restructuring.

“This reorganization will enable the company to implement a comprehensive transformation strategy to revitalize the business and brand, while keeping its production and operations in the U.S.” American Apparel said in a statement.

American Apparel’s net losses have totaled nearly $384 million over the last 5 1/2 years.