Could American Apparel Be Going Out of Business?

American Apparel Inc (NYSEMKT:APP), the troubled clothing retailer said on Monday, that it is not sure whether it will be able to continue operations for the next 12 months.

As Fortune reports, American Apparel “announced a plan two months ago to get back on its feet, relying less on sexy (or sexist, depending on whom you ask) imagery, and more on better merchandise and more enticing stores”. The quarter was marked by bad news: Sales fell 17 percent to $134 million and net loss widened to $19.4 million, or 11 cents a share.

American Apparel has “substantial doubt” it will stay in business, the company said Monday.

The company, which has been staving off bankruptcy through a series of cash infusions, last amended its $50-million line of credit with Capital One in March, according to regulatory filings.

“Such losses might continue for the remainder of 2015”, the company said in a statement. The stock of the clothing company has fallen 87% this year.

A manager at the American Apparel store at 528 S. Main in Downtown Memphis said she was not authorized to speak to the media. Moreover, the former CEO sued the company over his removal and claimed that the allegations against him are baseless. “It’s not impossible, but it’s a very tall order to do”.

American Apparel still hopes to turn things around by restructuring its debt and cutting another $30 million in costs over the next 18 months.

A group of lenders, including hedge fund Standard General, replaced its $50 million credit facility with a larger $90 million one, the Los Angeles-based retailer said on Monday.

American Apparel has about $11.2 million in cash, the company said last week.