Double-digit losses online during the second quarter of fiscal 2015 could be one of many signals that the end is nigh for troubled youth apparel brand American Apparel Inc.
American Apparel, No. 330 in the Internet Retailer 2015 Top 500 Guide, reported U.S. online sales of $7.604 million, down 18.3% from $9.309 million during the same time last year. It was a similar story when it came to companywide e-commerce sales, which came in at $11.573 million, down 20.2% from $14.501 million during the same period last year.
The news was no better when it came to American Apparel’s overall sales. The company reported net revenues of $134.394 million, down 17.2% from $162.397 million during the same period last year. During the quarter, online accounted for 8.6% of the company’s overall revenues compared to 8.9% during the year-ago quarter.
Even worse was a steeply higher net loss. Through the first six months of fiscal 2015, American Apparel incurred a net loss of $45.774 million, nearly double the $21.671 million loss during the first half of fiscal 2014.
With financial storm clouds hanging over the company’s head, American Apparel warned in its earnings filing that the company’s future is in doubt.
“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 twelve months,” the company writes. “These factors, among others, raise substantial doubt that we may be able to continue as a going concern.”
For the second quarter of fiscal 2015 ended June 30, 2015, American Apparel reported:
- U.S. retail sales, which include online sales, of $40.643 million, down 17.0% from $48.970 million during the same time last year.
- Canadian online sales of $549,000, down 28.7% from $770,000 during the same time last year.
- International online sales not including Canada of $3.420 million, down 22.7% from $4.422 million during the same time last year.
- A net loss of $19.350 million compared to a net loss of $16.205 million during the same period last year.
For the first six months of fiscal 2015, American Apparel reported:
- Net sales of $258.657 million, down 13.6% from $299.493 million during the same time last year.
- Online sales of $28.043 million, down 5.7% from $29.749 million during the same time last year.
- U.S. online sales of $18.931 million, down 4.4% from $19.809 million during the same time last year.
- Canadian online sales of $1.561 million, down slightly from $1.562 million during the same time last year.
- International online sales not including Canada of $7.551 million, down 9.9% from $8.378 million during the same time last year.