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American Apparel Sells Stake to Private Equity

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American Apparel, the clothing retailer, is near a deal to sell a 20 percent stake in the company to Lion Capital, a private equity firm that once owned Jimmy Choo, for about $80 million, people involved in the deal said on Thursday.

The deal is expected to be announced Friday. American Apparel is on the verge of defaulting on $16 million of debt owed to the technology mogul Michael S. Dell that comes due a week from Friday.

The deal should breathe new life into American Apparel and help stabilize its business in the economic downturn. The company announced last month that sales at its stores fell 9 percent, the first monthly drop in the company's history. Shares of American Apparel have fallen from a high of $10.86 a share this year to $1.49 a share on Thursday because of anxiety about its ability to pay its debts.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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