More turbulance is expected in the story of the embattled retail company, American Apparel.
The 26-year-old clothing chain, which has been trying to improve profits since the ousting of its controversial founder and CEO Dov Charney last year, will slash expenses by $30 million over the next 18 months by closing stores and laying off employees, it announced on Monday. The cuts will be part of a turnaround plan that also includes making additions to its leadership team. American Apparel also announced Monday that it filled two administrative positions.
"We are committed to turning this company around," CEO Paula Schneider said in a statement, adding that the cuts are necessary to "return the business to long-term profitability."
American Apparel has about 10,000 employees and 239 retail stores, at least 18 of which are in New York City, according to its website. When asked what city stores will face closure or layoffs, a company spokeswoman said it is not disclosing that information at this time.
The clothing retailer is facing 20 lawsuits filed by former CEO Dov Charney, who was ousted from his position in a whirlwind of scandals involving alleged sexual harassment of models and the company losing hundreds of billions of dollars under his leadership.