UPDATED -- The belabored turnaround attempt of American Apparel Inc. includes store closures, apparel updates, a modified loan, and the ouster of founder Dov Charney, who is suing the business. But those moves proved too little too late, and the business filed for Chapter 11 bankruptcy protection on Oct. 5, following a notice from the New York Stock Exchange warning of a potential delisting. Experts expected the chain to be one of several likely to fold under pressure. Overexpansion has been a problem for American Apparel and other retailers, as pre-Internet era brick-and-mortar plans prove tough to pare down because of the long-term commitment required by commercial real estate leases.
Potential bankruptcy cases and subsequent lease dumping will give dealmakers the opportunity to buy the businesses themselves, but also to scoop up groups of leases at a time, renegotiate them with better terms and grow healthy companies.