American Apparel Sinks on Subpoena, Operating Losses

American Apparel Inc. dropped in U.S. trading after saying it received a subpoena from the U.S. attorney’s office over changing accounting firms and that operating losses may result in its breach of a debt covenant.

The retailer, based in Los Angeles, also received inquiries from the U.S. Securities and Exchange Commission after Deloitte & Touche LLP quit last month and was replaced by Marcum LLP, according to a regulatory filing today. Deloitte notified the company that its 2009 financial statements may not be reliable when it ended the relationship, American Apparel said.