Top 40 supplier American Apparel (asi/35297) reported a 19% decline in third-quarter net sales, according to estimates provided by the company to the SEC. The supplier, which declared bankruptcy last month, stated in its filing that it is unable to issue a full Q3 earnings report due to “the quantity and complexity of the Chapter 11 Cases.”
According to its estimates, American Apparel suffered a decline of $29.8 million in year-over-year net sales for a total of $126 million in the quarter. The company attributed the result to a decline in same-store sales, unfavorable foreign exchange rates and store closures. In total the Los Angeles-based supplier suffered a net loss of $18.8 million for the quarter, roughly the same total of its net losses in the third quarter of 2014. The company did not provide data for its wholesale division, which includes promotional product sales.
For the year, American Apparel has accrued net sales of $384.8 million, a decline of 15.5%. The company has suffered net losses of $64.5 million in 2015, more than $40.9 million in losses in the first nine months of 2014. According to the filing, the net losses and decline in comparable sales were caused by “a strategic initiative to reduce inventory levels” by steeply discounting slow-moving retail merchandise in this year’s first quarter. American Apparel filed for Chapter 11 bankruptcy protection in early October after reaching a deal with most of the firm’s secured lenders. A company spokesperson told Counselor at the time that it would be “business as usual” with the supplier’s wholesale operation, which would continue to operate uninterrupted. In its second-quarter financial statement, American Apparel reported $48 million in its wholesale division, a decrease from $54 million the previous year. The supplier ranks 14th on the most recent Counselor Top 40 supplier list with $105.2 million in North American promotional product revenue, a 6% increase over the previous year.