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American Apparel's new investors are looking to sell shares

A group of Canadian investors seeks to sell its shares in American Apparel months after investing $15 million to rescue the troubled Los Angeles clothing company.

August 31, 2011|By Andrea Chang, Los Angeles Times

A group of Canadian investors is looking to sell its shares in Los Angeles clothier American Apparel Inc. just four months after investing $15 million to help rescue the company.

American Apparel said in a regulatory filing that the group, led by Canadian financier Michael Serruya, could sell up to 43.2 million shares of common stock.

"We do not know when or in what amount the selling stockholders may offer the shares for sale," American Apparel said in the filing Tuesday.

The investors agreed in April to pump $15 million in equity into the company at 90 cents a share.

They also received warrants to buy an additional $30 million worth of shares over a six-month period at the same price.

American Apparel in recent years has struggled with slumping sales and profits, although executives say the outlook is slowly improving.

For the quarter that ended June 30, the company reported a loss of $213,000, or flat earnings per share, compared with a loss of $14.7 million, or 21 cents, a year earlier. Sales were flat.

American Apparel shares rose 4 cents, or 4.3%, to 97 cents Tuesday. They are down 43% year to date.

Chief Executive Dov Charney could not be reached for comment.

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