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The American Apparel bankruptcy ripple effect is beginning. Following the closure of its Lower East Side store earlier this week, the beleaguered Los Angeles basics brand filed court documents requesting to close 13 stores, "the majority of [which] have been in the red for at least the past 12 months and have struggled under the weight of rents in some cases double that of market rates," WWD writes, before the year ends. Included in that is the entirety of Oak, which American Apparel acquired in 2013.
"Rather than devote additional resources and management to turnaround the Oak business, the debtors have determined it is in the best interests of their estates and creditors to divest the Oak business and to focus instead on the reorganization of the debtors' core American Apparel retail and online stores," according to court documents.
That means both the Noho and Greenpoint boutiques are on the chopping block, as is the e-commerce business (there are also two LA-area boutiques). American Apparel reportedly tried to spin Oak off with two potential buyers, the paper says, but negotiations ultimately failed. The silver lining? If this does indeed come to a fruition, a blowout closing sale with prices better than the warehouse sale is headed our way.
Of the nine other American Apparel stores the company included in this court filing, two are in New York, though locations weren't specified.