Lion Capital, the investment firm that formerly backed American Apparel Inc., urged the clothing chain to consider strategic alternatives such as a sale of the company, a person with knowledge of the matter said.

American Apparel received a letter from Lion on Sunday asking the retailer to form a special committee to review its options, said the person, who asked not to be identified because the matter is private. Lion also said it plans to name founding partner Lyndon Lea to American Apparel’s board instead of previous nominee Gene Montesano, one of the entrepreneurs behind Lucky Brand Jeans, the person said.

Subscribe Now

Complete access to real-time information and analysis of news and trends in the industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.