Troubled retailer American Apparel has cast fresh doubts over the future of its business as it revealed net losses had widened to $19.4m (£12.4m).
The fashion chain, which warned last week that it may not be able to continue operating in the next 12 months without raising funds, said second-quarter sales to June 30 had plummeted by 17.2% to $134m (£86m), while net losses increased to $19.4m (£12.4m) compared to $16.2m (£10.3m) in the same period a year ago.
American Apparel blamed the drop in sales on a lack of new styles in its spring and summer collections, and store closures.
The US chain, which has has 239 stores in 20 countries, said it had just $611.2m (£390.2m) in cash remaining to continue operating. The company owes $13.8m (£8.8m) in interest on senior secured notes to be payed on October 15.
American Apparel said in a statement: “Based upon the trends occurring in our operations since June 30, 2015 and through the date of this release, together with our current expectations and projections for the next four fiscal quarters, we believe that we may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.”
The retailer is being sued by founder and former boss Dov Charney, who was fired in December following allegations he had violated its sexual harrassment policy. Charney denies these charges.
Last month the US retailer revealed it was axing stores and jobs as part of a $30m (£19.4m) cost-cutting initiative.