American Apparel Inc. Chief Executive Dov Charney has bought shares in the struggling Los Angeles apparel company he founded, increasing his stake to 53 percent.
Charney in a regulatory filing, said he bought 1.2 million shares over several days last week at a price range between $1.21 and $1.23. That increases his holdings to 39.3 million shares.
American Apparel’s sales have slumped, and it has faced ongoing debt problems along with a round of immigration-related layoffs that hurt production. Earlier this month it said it expects a loss from operations this year and again warned it may not be in compliance with a covenant required by a key lender beginning next year.
This third “ongoing concern” warning comes in spite of significant steps Charney has taken to help his company. American Apparel, which operates 278 stores around the world, last month amended credit agreements but at the cost of higher interest payments. It gave a greater role to its creditor in running the company. It also brought on an acting president, former Blockbuster Video Chief Financial Officer Tom Casey, to handle day-to-day operations.
Shares were up 2 cents, or 1.5 percent, to $1.35 in midday trading on the New York Alternet.
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