Inc announced on Monday that it will close underperforming stores and laying off staff as part of a $30 million cost-cutting strategy.
In a company statement CEO Paula Schneider, who took the helm in January said, "Today's announcements are necessary steps to help American Apparel adapt to headwinds in the retail industry, preserve jobs for the overwhelming majority of our 10,000 employees, and return the business to long-term profitability."
The L.A.-based retailer who operates 239 stores in 20 countries and employs about 10,000 people expects to reduce costs over the next 18 months and will include a smaller work force to reflect a smaller store footprint. Details as to how many jobs or stores would be affected was not revealed by the company.
The effort is aimed at stabilizing the company financially by maximizing retail store performance and revamping merchandise assortment. However, the company warned that even if revenue increases and costs are cut, there can be no guarantee it will have enough financing commitments to meet funding requirements for the next 12 months without raising additional capital, or that it will be able to raise that capital.
The company also announced that it will unveil a new fall line focused on advanced basics and key items in both men's and women's. "Historically, the fall season has not been a major focus for the Company. We are beginning the process of re-merchandising the product assortment in our retail stores to increase productivity by SKU. The new styles are designed to increase revenue as we continue to evolve our product offering during this important selling season."