Home > Uncategorized > American Apparel shareholders vote down share-boosting plan

American Apparel shareholders vote down share-boosting plan

BLOOMBERG

Jul 20, 2015, 1:03pm PDT
American Apparel shareholders have voted against a proposal to increase the number of shares the company can issue, which limits the amount of funds the retailer can raise.

Los Angeles-based American Apparel(NYSE: APP), which has about 180 million shares outstanding, currently has authorization to boost its shares outstanding to 230 million. Shareholders at an annual meeting July 16 voted against a plan that would have authorized the company to increase its shares outstanding to 460 million, according to Bloomberg.
The vote against the measure was confirmed by David Glazek, a board member.

Shares of American Apparel plummeted more than 11 percent Monday to 30 cents a share by late afternoon trading in New York. The stock has lost more than 70 percent of its value since the beginning of the year.
American Apparel has been struggling with slowing sales while battling roughly 20 lawsuits and administrative actions initiated by founder and ousted Chief Executive Dov Charney and his associates.
The company earlier this week announced plans to cut $30 million in costs and return to profitability by shutting down stores and laying off workers. But it also warned that even if the company increases revenue and cuts costs, there can be no guarantee that the company will have sufficient financing commitments to meet funding requirements for the next 12 months without raising additional capital.
American Apparel, which has posted net losses of more than $300 million since 2010, in May reported a first-quarter loss of $26.4 million while sales dropped 9 percent to $124.3 million. The company said at the time that it would raise as much as $10 million by selling shares in the market. As of June 15, the chain had sold 3.5 million shares, according to Bloomberg.
As of March 31, American Apparel had about 10,000 employees and 239 retail stores in 20 countries, including the United States and Canada.

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