American Apparel likely to shut down its British stores after holidays

Beleaguered retailer American Apparel is likely to close its stores in the United Kingdom and some European locations after the holiday season.

That’s according to accounting giant KPMG, which announced Tuesday that it has been appointed as administrator in charge of American Apparel’s retail and wholesale business in Britain.

The Los Angeles-based clothier is up for sale, but its operations in the United Kingdom and certain parts of Europe will not be part of the sale, KPMG said. Therefore, those operations are “likely to be wound down.”

“The 13 UK stores are well stocked and will continue to trade as usual in the lead up to the peak Christmas trading period,” Jim Tucker, a restructuring partner at KPMG, said in the statement. “A number of the UK stores are in prime high street locations, and we will also aim to sell individual stores” after the holidays.

Tucker said that American Apparel has already stopped shipping inventory to its British stores after “experiencing strong retail headwinds.” The company’s British business, he said, is similarly struggling.

American Apparel declined to comment but pointed to the KPMG statement.

American Apparel, which filed for bankruptcy last year, lost its chief executive, Paula Schneider, in October. She stepped down after leading the company through the nearly two years of turmoil following the firing of Dov Charney, American Apparel’s founder and former CEO and chairman. The company’s general counsel, Chelsea Grayson, replaced Schneider.

The two most likely types of buyers for American Apparel are a branding and licensing company or a private equity firm, analysts said.

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