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NYSE to potentially delist American Apparel

Business

NYSE to potentially delist American Apparel

By Kristopher Fraser

28 Sep 2015

New York - Another day, another struggle for American Apparel. Last Friday, the New York Stock Exchange warned the L.A.-based retailer that they could be delisted. After the news was announced, the company's shares were off ten percent during after-hours trading to 15 cents for a market value of 28.20 million. dollars.

In a recent filing with the Securities and Exchange Commission, American Apparel said they received notice that they had fallen out of compliance with one of the board's standards because "it has sustained losses which are so substantial in relation to its overall operations or its existing financial resources or its financial condition has become so impaired that it appears questionable, in the opinion of the exchange, as to whether the company will be able to continue operations and/or meet its obligations as they continue to mature.”

According to the filing, NYSE is "concerned that the company’s common stock may not be suitable for auction market trading due to its low selling price." As a result, the potential for a reverse stock split was raised.

American Apparel has said they have begun work on a report to NYSE that details how they intend to regain compliance. They have under 2 weeks left to file the report, with an October 9 deadline. Currently, the company is also seeking listing fees, which are due by November 9.