American Apparel Successfully Completes Refinancing of Secured Debt

  American Apparel Successfully Completes Refinancing of Secured Debt

Business Wire

LOS ANGELES -- April 4, 2013

American Apparel, Inc. (NYSE MKT:APP), a vertically integrated manufacturer,
distributor, and retailer of branded fashion basic apparel, today announced
that it has successfully closed a private offering of $206 million principal
amount of its 13% senior secured notes due 2020 and has entered into a new $35
million five-year asset-backed revolving credit facility with Capital One
Bank. The Company used the net proceeds from the offering of the notes,
together with borrowings under the new revolving credit facility, to repay in
full and terminate its prior credit facilities with Lion Capital, LLC and
Crystal Financial LLC.

"Our new debt arrangements, coupled with improved financial performance, will
provide added flexibility in delivering upon our operating plan for 2013 and
beyond,” said Dov Charney, American Apparel’s chairman and chief executive
officer. “We appreciate the vote of confidence from Capital One and the
purchasers of the notes and the completion of this financing effort will allow
us to further focus our efforts in driving profitability for the benefit of
all of our stakeholders.

“I would like to personally thank Lyndon Lea of Lion Capital for his unwavered
support as a lender during the last four years, even when others doubted
American Apparel's 'Made in USA' sweatshop-free mission,” stated Mr. Charney.
“Also a special thank you is due to Michael Serruya and to Andy De Francesco
of Delavaco Capital, Inc. in Toronto, for their initial investment which came
at a critical time in 2011, and their continued support and friendship. At
American Apparel we are focused on leveraging art, design and innovation to
advance our business process, rather than relentlessly pursuing off shore
cheap labor. We welcome bondholders to our family of stakeholders, and
re-emphasize that it is our mission to ensure that all stakeholders—customers,
workers, shareholders, suppliers, and now bondholders—have a positive
experience when touched by our business. We also welcome Capital One as our
new bank, under our new five year agreement with them, which will greatly
reduce our first lien borrowing costs. At this juncture it's time to roll up
our sleeves and build American Apparel's future.”

"Capital One Bank is pleased to work with American Apparel, a leading
manufacturer, distributor, and retailer of branded fashion basic apparel, to
support the company's recapitalization and growth strategy," said Michael
Burns, Senior Vice President and Asset Based Lending Regional Manager, Capital
One Bank. "We look forward to building our relationship with American Apparel
to help position the company for continued market leadership, growth and
success."

About American Apparel

American Apparel is a vertically integrated manufacturer, distributor, and
retailer of branded fashion basic apparel based in downtown Los Angeles,
California. As of March 31, 2013, American Apparel had approximately 10,000
employees and operated 251 retail stores in 20 countries, including the United
States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium,
France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Israel,
Australia, Japan, South Korea, and China. American Apparel also operates a
leading wholesale business that supplies high quality T-shirts and other
casual wear to distributors and screen printers. In addition to its retail
stores and wholesale operations, American Apparel operates an online retail
e-commerce website at www.americanapparel.net.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding
company whose subsidiaries, which include Capital One, N.A., and Capital One
Bank (USA), N. A., had $212.5 billion in deposits and $312.9 billion in total
assets outstanding as of December 31, 2012. Headquartered in McLean, Virginia,
Capital One offers a broad spectrum of financial products and services to
consumers, small businesses and commercial clients through a variety of
channels. Capital One, N.A. has more than 900 branch locations primarily in
New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of
Columbia. ING DIRECT, a division of Capital One, N.A., offers direct banking
products and services to customers nationwide. A Fortune 500 company, Capital
One trades on the New York Stock Exchange under the symbol "COF" and is
included in the S&P 100 index.

Safe Harbor Statement

This press release, and other statements that the Company may make, may
contain forward-looking statements. Forward-looking statements are statements
that are not historical facts and include statements regarding, among other
things, the Company's future financial condition, performance and flexibility;
results of operations; future business plans, including anticipated cost
savings and the Company's prospects and strategies for future growth and
market leadership; and the impact that the new debt arrangements are expected
to have on the Company. Such forward-looking statements are based upon the
current beliefs and expectations of American Apparel's management, but are
subject to risks and uncertainties, which could cause actual results and/or
the timing of events to differ materially from those set forth in the
forward-looking statements, including, among others: the ability to generate
sufficient liquidity for operations and debt service; changes in the level of
consumer spending or preferences or demand for the Company's products;
increasing competition, both in the U.S. and internationally; the evolving
nature of the Company's business; the Company's ability to hire and retain key
personnel and the Company's relationship with its employees; suitable store
locations and the Company's ability to attract customers to its stores; the
availability of store locations at appropriate terms and the Company's ability
to identify and negotiate new store locations effectively and to open new
stores and expand internationally; effectively carrying out and managing the
Company's strategy, including growth and expansion both in the U.S. and
internationally; disruptions in the global financial markets; failure to
maintain the value and image of the Company's brand and protect its
intellectual property rights; declines in comparable store sales and wholesale
revenues; financial nonperformance by the Company's wholesale customers; the
adoption of new accounting pronouncements or changes in interpretations of
accounting principles; seasonality of the business; consequences of the
Company's significant indebtedness, including the Company's relationships with
its lenders and the Company's ability to comply with its debt agreements,
including the risk of acceleration of borrowings thereunder as a result of
noncompliance; the Company's ability to generate cash flow to service its
debt; the Company's liquidity and losses from operations; the Company's
ability to develop and implement plans to improve its operations and financial
position; costs of materials and labor, including increases in the price of
yarn and the cost of certain related fabrics; the Company's ability to pass on
the added cost of raw materials to its wholesale and retail customers; the
Company's ability to improve manufacturing efficiency at its production
facilities; the Company's ability to effectively manage inventory and
inventory reserves; location of the Company's facilities in the same
geographic area; manufacturing, supply or distribution difficulties or
disruptions; risks of financial nonperformance by customers; investigations,
enforcement actions and litigation, including exposure from which could exceed
expectations; compliance with or changes in U.S. and foreign government laws
and regulations, legislation and regulatory environments, including
environmental, immigration, labor and occupational health and safety laws and
regulations; costs as a result of operating as a public company; material
weaknesses in internal controls; interest rate and foreign currency risks;
loss of U.S. import protections or changes in duties, tariffs and quotas and
other risks associated with international business including disruption of
markets and foreign supply sources and changes in import and export laws;
technological changes in manufacturing, wholesaling, or retailing; the
Company's ability to upgrade its information technology infrastructure and
other risks associated with the systems that are used to operate the Company's
online retail operations and manage the Company's other operations; adverse
changes in its credit ratings and any related impact on financing costs and
structure; general economic and industry conditions, including U.S. and
worldwide economic conditions; disruptions due to severe weather or climate
change; and other risks detailed in the Company's filings with the Securities
and Exchange Commission, including the Company's Annual Report on Form 10-K
for the year ended December 31, 2012. The Company's filings with the SEC are
available at www.sec.gov. You are urged to consider these factors carefully in
evaluating the forward-looking statements herein and are cautioned not to
place undue reliance on such forward-looking statements, which are qualified
in their entirety by this cautionary statement. The forward-looking statements
speak only as of the date on which they are made and the Company undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

Contact:

American Apparel
John J. Luttrell, 213-488-0226
Chief Financial Officer
or
ICR
John Rouleau, 203-682-8342 (Investor Relations)
john.rouleau@icrinc.com
 
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