Unfashionable Outlook For American Apparel Investors; Alleged Revealing Photos Not Helping Current CEO
- APP is trying to raise capital from hedge fund financier Standard General to cope with a $10 million debt, called in by Lion Capital.
- The financing would allow APP to offset a loan made by the founder of the company, Dov Charney, which is now on the outs.
- Mr. Charney has recently been charged with misusing company funds, as well as sexual harassment of a former employee; it is likely that the company leadership will be restructured.
- With leadership and financing in flux, as well as poor performance in its sector, we suggest investors take profits in APP.