Beleaguered US fashion chain American Apparel has hired Blockbuster executive Tom Casey as acting president, in line with a pledge to lender Lion Capital to secure key management talent.
According to documents filed at the Securities and Exchange Commission, Casey, a management veteran, joined on October 1 on an initial 15-month contract which will automatically extend a year at a time from January 1 2012.
He will receive a basic salary of $400,000 (£251,000) and will be entitled to a 2010 bonus of $75,000 (£47,000).
Casey spent three years as executive vice president and chief financial officer at Blockbuster until August. The movie rental chain has experienced turmoil of its own over recent years and the chain filed for Chapter 11 bankruptcy protection last month.
Before that, Casey was managing director at Deutsche Bank Securities and held investment banking positions at Citigroup and Merrill Lynch.
He will report to Dov Charney, chairman, chief executive and founder of American Apparel, and has been tasked with developing its operating strategy.
The high profile appointment is the first of “several” new senior hirings promised by American Apparel to Lion Capital.
In June the retail chain renegotiated its debt covenants with Lion to avoid breaching them, but it will have to grow its profits significantly to keep within the terms of the new deal.
It has to post consolidated EBITDA of $20m (£12.6m) for the 12 months to January 31, 2011. This profitability figure rises over the next three years, with a required EBITDA of $80m (£50.6m) for the year to September 2013, according to reports.
In September American Apparel also won an extension to its deadline for filing its second quarter results to the New York Stock Exchange without being delisted. It has a new deadline of November 15.
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