American Apparel's Profits Are Getting Clipped Thanks To Groupon
Sam Ro | Jan. 11, 2012, 1:14 AM | 10,272 | 5
APPJan 18 08:00PM
Just when it looked like things were starting to look up for cash-strapped American Apparel, profits are reportedly getting shaved.
From The New York Post's James Covert:
The hipster clothing chain racked up impressive sales gains during the holidays, but profits were squeezed hard as it took steep discounts, including those from a barrage of Groupon offers nationwide, sources told The Post.
American Apparel rang up millions of dollars in the fourth quarter selling cardigans, corduroys and sexy leggings through the daily deals site — a heap of bargains amounting to a “small but material” percentage of the company’s $157 million in total sales during the period, said one source briefed on the company’s finances.
Most important, specifics were provided on refinance activities; it is likely that a lender has been identified and specific terms have been ironed out. A minimum hurdle of 35MM EBITDA was provided to ensure refinancing goes through which seems very attainable. The tenor and an interest range have also been closely defined. This gives me confidence that a refinance WILL happen, still a question of when but I think Q4 or Q1 2013 are most likely time period.