Although its total sales have increased because it opened 80-plus stores last year, same store sales at American Apparel Inc. are down, an indication that the recession has hit the trendy L.A.-based clothing company.
Until now, American Apparel has been reporting strong sales despite an otherwise dismal consumer market. The company on Thursday said its February same-stores sales decreased 9 percent from the previous year while retail sales increased 17 percent to $24.3 million. In addition to the 80-plus stores last year, the company opened three new stores in February.
The company reported a 2 percent increase in same-stores sales for January. American Apparel attributed part of the decrease in year-over-year same-store sales to the leap year in February 2008, which gave American Apparel an extra selling day last year.
The company has had trouble with its financing. Last month, American Apparel's Chief Executive Dov Charney loaned the company $4 million at an annual interest rate of 6 percent. The loan matures in January 2013.
That loan came two months after the company renegotiated nearly $120 million in debt with on tougher terms. The company extended the maturity of a $51 million loan three months to April but has to make amortization payments of $16 million in March plus three other payments of $5 million each spread out over the year. It must also get additional approvals from lenders.
American Apparel shares closed down 36 cents, or 18 percent, to $1.62 on the New York Stock Exchange Alternext.
For reprint and licensing requests for this article, CLICK HERE.