The board of American Apparel Inc has received a letter from British takeover firm Lion Capital, pushing it to explore strategic options include a sale, a source familiar with the situation said on Sunday. The letter also said that Lion Capital would nominate Lyndon Lea, one of its founders, to the clothing retailer's board of directors to replace one of its previous designees, Gene Montesano. Lion Capital, a former lender to the retailer, has the right to nominate two of American Apparel's nine board seats. Lea had previously been on the board but stepped down in 2011.Lion Capital also has warrants to purchase up to 12 percent of the retailer.The letter, which is being reviewed by the board, asks the board to form a special committee to evaluate options, according to the source, who asked not to be named because the matter is not public.Representatives for American Apparel and Lion Capital did not immediately respond to a request for comment.
American Apparel, Inc. is a vertically integrated manufacturer, distributor, and retailer of branded fashions basic apparel and accessories for women, men, children and babies. Shares of APP remained unchanged at $1.06. In the past year, the shares have traded as low as $0.46 and as high as $1.45. On average, 1866900 shares of APP exchange hands on a given day and today's volume is recorded at 1864816.
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