Reuters scoops competition on American Apparel restructuring news
09.03.2010
In a second major scoop on American Apparel, Reuters exclusively reported on Sept 3 that the beleaguered apparel brand was in talks to hire an outside restructuring firm. The news sent shares of American Apparel up as much as 10 percent to their highest level since the company said it may not survive if operations dont soon turn around. The stock bucked a down day for markets and retailers in particular, as every member of the S&P Apparel Retail Index fell, and the Dow Jones US Retail Apparel index was down 2 percent. Reuters learned that Bank of America had forced American Apparel to call in the turnaround experts to bring order to an increasingly chaotic and distracted management, struggling with debt obligations, shareholder lawsuits, threats of delisting, and warnings from auditors that American Apparel is heading for the rocks. Competitors did not have the report, and a number of media outlets in American Apparels hometown cited Reuters` story, including LA Weekly, the Los Angeles Business Journal and LA Observed. ABC News also picked up the report.
