American Apparel falls into administration

ADMINISTRATORS have been appointed to the UK business of American Apparel, which has a store in Nottingham, as the retailer decided to wind down its European operations.

The crisis hit US retailer filed for Chapter 11, the US version of administration, just over a year ago and is once again facing an uncertain future. It is now up for sale after its chief executive Paula Schneider stepped down in September.

The group’s 13 UK stores and some other European operations are not part of the US sale and are therefore likely to be wound down, according to Jim Tucker and Richard Beard of KPMG, joint administrators of American Apparel (UK) Ltd and American Apparel (Carnaby) Ltd.

However, it was stressed that all the UK stores continue to trade and no redundancies have been made.

Mr Tucker said the group has been experiencing “strong retail headwinds” which has culminated in the US parent deciding to stop inventory shipments to the UK.

“The UK business has experienced similar trading difficulties, resulting in the appointment of administrators,” he said.

“The 13 UK stores are well stocked and will continue to trade as usual in the lead up to the peak Christmas trading period.  Whilst the UK business is not part of the US sale, a number of the UK stores are in prime high street locations, and we will also aim to sell individual stores following the Christmas trading peak.”