American Apparel approached about possible takeover

December 22, 2014, 3:07 PM UTC
American Apparel Forced To Layoff Over A Thousand Factory Workers
CHICAGO - SEPTEMBER 04: A pedestrian passes by and American Apparel store in the Wicker Park neighborhood September 4, 2009 in Chicago, Illinois. American Apparel Inc. plans to terminate about 1,500 employees in its Los Angeles factory, approximately one-quarter of the work force, following a probe by U.S. immigration authorities. (Photo by Scott Olson/Getty Images)
Photograph by Scott Olson — Getty Images

American Apparel confirmed Monday there is interest in acquiring the retail chain for as much as $245 million, a potential bid that comes less than a week after the company fired CEO Dov Charney and named a successor.

The struggling apparel maker, which is known for its racy ads and connection to controversial former CEO Charney, said it received an indication “of interest to acquire the company for $1.30 to $1.40 per share.” An offer within that range would value American Apparel between $227 million to $245 million.

“The Board takes these matters seriously, and it will evaluate this proposal in the ordinary course of business,” American Apparel (APP) said in a statement. The company didn’t disclose the name of the potential bidder.

A buyout at that price would represent a premium to American Apparel’s recent share price, which has consistently traded under $1 since the beginning of September. But it is also a steep decline from the roughly $15 per share value that the company commanded at the end of 2007, the brand’s peak stock performance.

Since then American Apparel has been mired in annual losses and shares have generally outperformed the Dow Jones U.S. Retail Index. American Apparel has reported four consecutive years of annual losses, and is on track to record a fifth in 2014.

American Apparel has sought to turn the chapter by officially terminating Charney, who was removed from the CEO role in June after the company alleged he had misused corporate money and violated sexual harassment policies. Over the years, Charney, who had been serving as a consultant in recent months, faced repeated accusations of sexually harassing employees.

The company is now being steered by Paula Schneider, a fashion veteran who has held senior positions at BCBG Maxx Azria and other firms. American Apparel continues to makeover its top ranks: on Monday it announced co-chairman Allan Mayer and David Danziger have stepped down and will be replaced by board member Colleen Brown. Brown has served on American Apparel’s board since August.

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