American Apparel, Inc. Announces Comparable Sales for December 2013 Decreased 6%

  American Apparel, Inc. Announces Comparable Sales for December 2013
  Decreased 6%

Business Wire

LOS ANGELES -- January 9, 2014

American Apparel, Inc. (NYSE MKT:APP), a vertically integrated manufacturer,
distributor, and retailer of branded fashion basic apparel, announced
preliminary sales for the month of December 2013. On a preliminary basis,
total net sales were $60.5 million, a decrease of 6% over the prior year.
Comparable sales decreased 6%, including a 7% decrease in comparable store
sales in the retail store channel and a 1% decrease in net sales in the online
channel. Wholesale net sales decreased 2% for the month. For the year ended
December 31, 2013, total net sales increased 3% to $633.9 million, with a 3%
increase in comparable sales and a 4% increase in wholesale net sales.

The following delineates the components of the changes for the month, quarter
and year-to-date periods indicated:

                 December             Quarter-Ended        Year-Ended
                       2013^(1)   2012       2013^(1)   2012       2013^(1)   2012
      Comparable
      store
      sales
      Stores           (7   )%      8  %       (4   )%      7  %       1    %       13 %
      Online           (2   )%      69 %       2    %       42 %       14   %       30 %
      Total            (6   )%      15 %       (3   )%      11 %       3    %       15 %
                                                                                    
      Sales
      growth
      Wholesale        (2   )%      16 %       —    %       19 %       4    %       12 %
      Total            (6   )%      15 %       (2   )%      10 %       3    %       13 %

       Preliminary, subject to adjustment. Year-to-date comparable store sales
^(1)  results have been adjusted to exclude impact of extra leap-year day in
       2012.

Dov Charney, Chairman and CEO, commented, “Some of the causes of our reduced
comp store sales in the month of December include: (1) the fact that we were
up against a positive 15% comp from last year; (2) a compressed shopping
season, the result of Thanksgiving falling later than it has in a decade; (3)
under-buying of some of our strongest selling items for the season because our
management team was intensely distracted during the implementation of our new
distribution center (which is now successfully completed); and (4) December
2013 had one less Saturday than 2012 and unlike most other retailers we use
the actual calendar in reporting comparable store sales, as opposed to the
retail reporting calendar. It is also noteworthy that our sales improved
towards the end of the month (the last week of the month comparable store
sales were only down 1.7%), as opposed to the beginning of the month when we
felt our consumer was 'shopped out' as a result of Black Friday. Although
December was disappointing, and we could face a challenging environment for
the remainder of the winter, our management team is energized and we are
excited about our prospects for Spring and Summer 2014 as well as for the
calendar year as a whole.”

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 January 1, 2014, American Apparel had approximately 10,000
employees and operated 248 retail stores in 20 countries, including the United
States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium,
France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Australia,
Japan, South Korea, and China. American Apparel also operates a global
e-commerce site that serves over 60 countries worldwide at
http://www.americanapparel.com. In addition, American Apparel operates a
leading wholesale business that supplies high quality T-shirts and other
casual wear to distributors and screen printers.

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 and liquidity (including the
impact of our projected noncompliance with, and availability under, our debt
instruments and waivers or amendments of those instruments), results of
operations, and future business plans and expectations, including statements
related to the effect of, and our expectations with respect to, the operation
of our new distribution center and future cost, inventory and sales impacts
related thereto. 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: our ability to generate or obtain from
external sources sufficient liquidity for operations and debt service; our
financial condition, operating results and projected cash flows; consequences
of our significant indebtedness, including our relationship with our lenders
and our ability to negotiate with our lenders covenants that will allow for us
to achieve and maintain compliance with our debt agreements, our ability to
generate cash flow to service our debt and the risk of acceleration of
borrowings thereunder as a result of projected noncompliance; disruptions in
the global financial markets; our ability to maintain compliance with the
exchange rules of the NYSE MKT, LLC; adverse changes in our credit ratings and
any related impact on financial costs and structure; continued compliance with
U.S. and foreign government regulations, legislation, and regulatory
environments, including environmental, immigration, labor, and occupational
health and safety laws and regulations; 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; risks associated with our
foreign operations and foreign supply sources, such as disruption of markets,
changes in import and export laws, currency restrictions, and currency
exchange rate fluctuations; the highly competitive and evolving nature of our
business in the U.S. and internationally; changes in the level of consumer
spending or preferences or demand for our products; our ability to pass on the
added cost of raw materials to customers; our ability to attract customers to
our stores; the availability of store locations at appropriate terms and our
ability to identify locations and negotiate new store leases effectively and
to open new stores and expand internationally; our ability to renew leases at
existing locations on economic terms; loss or reduction in sales to our
wholesale or retail customers or financial nonperformance by our wholesale
customers; risks that our suppliers or distributors may not timely produce or
deliver our products; changes in the cost of materials and labor, including
increases in the price of raw materials in the global market and increases in
minimum wages; our ability to effectively carry out and manage our strategy,
including growth and expansion both in the U.S. and internationally;
technological changes in manufacturing, wholesaling, or retailing; our ability
to successfully implement our strategic, operating, financial and personnel
initiatives; changes in key personnel, our ability to hire and retain key
personnel, and our relationship with our employees; our ability to maintain
the value and image of our brand and protect our intellectual property rights;
our ability to improve manufacturing efficiency at our production facilities;
our ability to operate our distribution facility located in La Mirada,
California without further unanticipated costs, negative sales impact or other
transition issues, including the ability to achieve, as and when planned,
labor cost reductions; the risk, including costs and timely delivery issues
associated therewith, that information technology systems changes may disrupt
our supply chain or operations and could impact our cash flow and liquidity,
and our ability to upgrade our information technology infrastructure and other
risks associated with the systems that operate our online retail operations;
our ability to effectively manage inventory levels; litigation and other
inquiries and investigations, including the risks that we, or our officers or
directors in cases where indemnification applies, will not be successful in
defending any proceedings, lawsuits, disputes, claims or audits, and that
exposure could exceed expectations or insurance coverages; the adoption of new
accounting standards or changes in interpretations of accounting principles;
seasonality and fluctuations in comparable store sales, wholesale net sales
and associated margins; location of our facilities in the same geographic
area; general economic conditions, including increases in interest rates,
geopolitical events, other regulatory changes and inflation or deflation;
disruptions due to severe weather or climate change; disruptions due to
earthquakes, flooding, tsunamis or other natural disasters; 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 and Form 10-Qs for the quarters ended March 31, 2013, June 30, 2013
and September 30, 2013. 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, Inc.
John J. Luttrell
Chief Financial Officer
213-488-0226
or
ICR, Inc.
John Rouleau
Managing Director
203-682-8342
John.Rouleau@icrinc.com
 
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