American Apparel nears default

americanapparel.jpgThe L.A.-based clothing manufacturer reported a first-quarter operating loss of $17.6 million as it tries to amend its $80-million loan agreement with Lion Capital. Needless to say, the stock is taking a bath this morning, down almost 27 percent, to below two bucks a share. American Apparel has a sleight-of-hand ownership structure (Lion Capital acts as lender and shareholder), so things may not be as bleak as they seem. But clearly this is not a model of solid management, starting with last year's government crackdown on 1,500 American Apparel workers who didn't have proper working papers.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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