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American Apparel approached for possible buyout

December 18, 2014

American Apparel storeAmerican Apparel store
An American Apparel store.Photograph by Andrew Burton — Getty Images

Clothing manufacturer American Apparel Inc has been approached by private equity firm Irving Place Capital for a possible takeover, The Wall Street Journal reported, citing sources.

The Los Angeles-based retailer received an expression of interest from Irving Place in the last couple of weeks, people familiar with the matter told the Journal, adding that the approach was initially rebuffed because of the low price.

Irving Place then raised its price range to $1.30 to $1.40 per share. The board has yet to respond, the sources told the Journal.

American Apparel declined to comment to Reuters. Irving Place could not be reached immediately for comment.

American Apparel shares on Thursday closed at $1.00, up 31 cents, or 44.9%. In after-hours trading, the shares were up 4%.

American Apparel this week fired Chief Executive Officer Dov Charney, ending a tenure racked with sexual assault allegations and scandal.

The Journal also cited sources saying that Charney may seek legal action over this dismissal, complicating a sale of the company.