American Apparel's co-chairman said on Monday the company was not for sale, had no need for immediate capital, and that the search for a new chief executive to replace ousted Dov Charney had generated "enormous interest," according to Reuters.
The board of the hipster retail chain terminated Charney, the company's founder, as chairman and CEO last week, citing alleged misuse of corporate funds and his role in disseminating nude photos of an ex-employee who had sued him, Reuters reported.
"We are certainly not looking to sell the company," Allan Mayer, the company's new co-chairman, told Reuters.
"If someone came and said they want to buy American Apparel for $10 per share, we'd be crazy to not listen ... but by no means (are we) looking to sell now," he said.
Charney, the largest shareholder in the company with a 27.2 percent stake, said in a regulatory filing that he had been approached by "certain persons" who had expressed support for his continued leadership, according to Reuters.
Charney, who has a long history of allegations of misconduct and bizarre behavior, including appearing at a meeting in his underwear, said his supporters included stockholders, Reuters reported. FiveT Capital, which holds about 13 percent in American Apparel and is the largest shareholder after Charney, has indicated it does not support him, he said.
Mayer noted that American Apparel had hired investment banking advisory firm Peter J. Solomon to ensure adequate access to capital, according to Reuters. The company said last week that Charney's ouster could result in the 250-store chain breaching debt covenants.
"At this moment don't have need for additional capital, but it is nice to have something in reserve if something unexpected happens," Mayer said, Reuters reported.
American Apparel, which has reported losses in 16 of the past 17 quarters, had long-term debt of about $215 million as of March 31, according to Reuters.
