The sexy times might be over for American Apparel.
Last summer, the retailer largely known for its controversial ads depicting Lolita-like ladies in compromising positions, and for its CEO Dov Charney's questionable treatment of female employees, was forced to find a new accounting firm after Deloitte abruptly resigned. At the time, American Apparel said the resignation had nothing to do with Deloitte finding anything fraudulent inside the AA books, nor was AA in trouble of going bankrupt, despite its rather poor financial condition.
Following the debacle, the Melville, N.Y.-based accounting firm Marcum took Deloitte's place overseeing AA's books. And today it was revealed that Marcum might be helping the retailer file for bankruptcy protection after all.
In 2010, American Apparel lost $86 million, and in its recent SEC filing it said the future looks even uglier. Here's an excerpt from the filing:
"If the company is not able to timely, successfully or efficiently implement the strategies that the company is pursuing to improve its operating performance and financial position, obtain alternative sources of capital or otherwise meet its liquidity needs, the company may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code."
That is, if those alluring ads don't start bringing dudes and nymphettes into AA outlets by the busload, and thus bringing the firm some big-time cash flow, the show might soon be over.
In any case, I think this proves, once and for all, that accounting can indeed be sexy.
(DealBook: American Apparrel Warns of Bankruptcy)