American Apparel warns that it may be closing its doors, according to Fortune. The company said on Monday that it has a "substantial doubt" that the business will continue to stand, according to CNN Money. The retailer has plans to reorganize its debt and extend its line of credit from $50 million to $90 million, but there is little hope that the company will crawl out from the hole they've fallen into.
"We believe that we may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern," American Apparel said on Monday, according to Fortune.
In the second quarter of 2015, American Apparel Inc. reported a net loss of $19.4 million, or $0.11 per share. That's a significant increase from 2014 when the reported net loss was $16.2 million, or $0.09 per share, according to Nasdaq.
Net sales for the second quarter of 2015 decreased 17.2 percent to $134.4 million from $162. 4 million in 2014, according to Nasdaq.
Currently, American Apparel only has about $6.8 million in cash on hand with an interest payment on its debt due in October, according to CNN Money.
While the company still hopes for the best, many believe the retailer filing for bankruptcy is more likely, according to Fortune.
