The hiring of Peter J. Solomon Co. comes less than a week after the multichannel apparel retailer ousted its CEO for alleged misconduct.
Apparel maker and multichannel retailer American Apparel Inc. has retained Peter J. Solomon Co., an investment banking firm that specializes in capital restructuring, and mergers and acquisitions, the merchant announced today.
American Apparel would not comment on whether selling the company was an option. A spokeswoman at Peter J. Solomon Co. says it was hired “solely” to advise the retailer on ways to access capital.
In announcing plans to terminate CEO Dov Charney last week, American Apparel noted that the dismissal of the CEO could trigger loan default clauses in its lending agreements, and that it would be seeking waivers from those lenders. The company owed lenders $218.9 million as of the end of last year.
“We believe the hiring of a financial and strategic advisor at this important juncture is in the best interest of our stockholders and will help maximize long-term shareholder value,” says John Luttrell, interim CEO and chief financial officer. “Although the company currently is on track to meet its previously disclosed 2014 EBITDA, we are pleased to be working with Peter J. Solomon to ensure that we have adequate access to capital in the future at a reasonable cost.”
Peter J. Solomon Company is a 25-year-old investment banking advisory firm that concentrates on mergers, acquisitions, divestitures, recapitalizations, restructurings and fairness opinions.
The move comes less than a week after American Apparel’s board of directors fired Charney for alleged misconduct. American Apparel didn’t specifically say why Charney was suddenly terminated but did note “the board’s decision to replace Mr. Charney grew out of an ongoing investigation into alleged misconduct.”
Over the last six years American Apparel has been sued six times for sexual harassment by former employees, according to the company’s latest annual report filed in April with the U.S. Securities and Exchange Commission.
American Apparel is No. 286 in the Internet Retailer Top 500 Guide.