Hedge fund Lion Capital urged Beleaguered branded apparel maker American Apparel, Inc. (APP) to consider options including a sale of the company, the Wall Street Journal reported citing people familiar with the matter.
Lion Capital, which had lent money to American Apparel and holds warrants that could give it a big stake, reportedly made its case in a letter Sunday that urged the retailer's board to create a special committee to evaluate strategic alternatives.
The report noted that Lion Capital also nominated one of its founding partners, Lyndon Lea, to American Apparel's board in place of another nominee, Gene Montesano, the founder of Lucky Brand Jeans, whose name the hedge fund is withdrawing. Lion Capital asked that Lea sit on the special committee.
The fund holds warrants to buy 12% of American Apparel's stock and has the right to nominate two directors to the company's board. One of those seats was filled by Robert Mintz.
Lion Capital's request follows a preliminary takeover proposal from private-equity firm Irving Place Capital that valued the retailer at $1.30 to $1.40 per share.
Last week, the retailer confirmed it received an indication of interest to acquire it for $1.30 to $1.40 per share, adding that it would evaluate the proposal in the ordinary course of business. Media reports indicated that the takeover offer was from private equity firm Irving Place Capital.
Los Angeles, California-based American Apparel then said that it adopted a new shareholder rights plan, a move seen as aimed at preventing its founder Dov Charney from attempting a hostile takeover of the company.
In Mid-December, American Apparel said it terminated former President and CEO Dov Charney for cause in accordance with the terms of his employment agreement, following an internal investigation. The company appointed veteran fashion executive Paula Schneider as CEO, effective January 5.
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.