Los Angeles Business Journal

Swiss Firm Takes Stake in American Apparel

By Deborah Crowe Tuesday, April 8, 2014

A Swiss investment firm has acquired more than a third of American Apparel’s latest stock offering, becoming the company’s second-largest investor and bailing the L.A. company out of a debt crisis.

The apparel retailer and manufacturer raised $30.5 million on March 27 by selling 61 million new shares at a discounted 50 cents a share. Zurich-based FiveT Capital and affiliates acquired 22 million of those shares, giving FiveT more than 12 percent of the company, according to regulatory filings.

American Apparel’s largest shareholder is Chief Executive Dov Charney, with a nearly 30 percent stake.

The company was facing a $13.4 million interest payment this month that exceeded available cash. Johannes Minho Roth is FiveT’s chief executive and co-founder. In a Bloomberg News interview, Roth, a German citizen, said he was confident of Charney’s ability to turn the company around.

“He’s a visionary,” Roth told Bloomberg. “Dov wants to make it his life goal to make American Apparel into a successful company. I have a very positive view on him.”

Lion Capital, London private equity firm that has backed American Apparel since 2009, also gained 24.5 million shares in the stock sale by exercising warrants.

American Apparel shares closed down 1 cent, or 1.8 percent, to 48 cents on the NYSE.