Survival of the fittest

Producer and retailer American Apparel Inc. has announced it may lose to the outcomes of the recession and shut down. Such news did not come as a surprise since the company has been facing devastating losses. American Apparel was warned of improper financial reporting by Deloitte, which served as the company’s auditors, resulting in the auditors’ resignation and a subpoena from the U.S. Attorney’s Office this past July. American Apparel reported that current sales trends projected for the rest of the year, and it’s mammoth $120.3 million debt will most likely lead to the company’s failure to meet credit terms by the end of September.

American Apparel Inc.’s shut down serves as another devastating outcome of the cruel recession and the retail industries blow. The company was known for producing and selling U.S made T-shirts, an ever-increasing rarity at a time where people choose to buy foreign clothing due to lower prices. I believe that the company’s inability to cope with the dramatically changing and competitive retail industry, its chief executive’s unwillingness to receive help, and of course the increased foreign and domestic competition will all serve as the final termination of the company.

Reading this was especially painful for me, as I recognize that a corporation’s shut down is not just a printed story. Many people will be losing their jobs at the very near future, forcing factory employees as well as executives to join the great number of unemployed Americans.

Written by Michael Milner
Article: http://online.wsj.com/article/SB10001424052748703824304575435282703897308.html?mod=relevancy