Los Angeles, CA (CNS) – American Apparel is selling a fifth of its business to Lion Capital, the British private equity firm. The U.S. clothing retailer, which is based in Los Angeles, will get about $80 million pumped into American Apparel’s coffers.
American Apparel is close to being late on a payment of $16 million of debt. The company owes that amount to Michael Dell, the technology mogul.
The $16 million is due in seven days. Lion Capital will most likely receive warrants for 16 million new shares with the new deal, worth $2 each.
Lion Capital already owns lots of consumer companies: the soft drink company Orangina Schweppes, the chips company Kettle Foods, and Wagamama, the noodle stores. With American Apparel, clothing is added to Lion Capital’s stable.
American Apparel suffered in sales across the globe, with sales falling nine percent last month. However, that drop isn’t too bad, because that is the company’s first drop in its history.
American Apparel shares fell from $10.86 a share earlier this year to $1.49 a share. The company named Adrian Kowalewski as the company’s chief financial officer in January.
It doesn’t appear that the management shake-up has much to do with the drop in American Apparel’s sales, however.