LA based American Apparel faces bankruptcy as sales drop

LOS ANGELES, CA (FOX 11 / CNS) Bad news kept on coming today for American Apparel Inc., which reported a continuing drop in sales and profits, raising the possibility that the company won't last another year.

"We incurred losses from operations and negative cash flows from operating activities for the six months ended June 30, 2015, and such losses might continue for the remainder of 2015," according to the company. "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 12 months.

"These factors, among others, raise substantial doubt that we may be able to continue as a going concern."

The company reported a 17.2 percent drop in second-quarter sales from the same quarter the previous year, along with a 25.3 percent dip in gross profit. The company's net loss for the second quarter was $19.4 million, or 11 cents per share, compared to net loss of $16.2 million, or 9 cents per share, for the second quarter of 2014.