Clothing retailer American Apparel has filed for bankruptcy. The company has lost roughly 75 per cent of its value since its peak before the 2008 financial crash, and has struggled to keep up with its debts over the past year.

The company employed about 10,000 workers at the end of the first quarter of 2015, but only 9,000 employees six months later, which means it has laid-off 10 per cent of its employees during that time. Dov Charney was ousted as CEO during the protracted financial decline of the company by the large hedge funds that were the company’s main creditors and that controlled the board of directors.

The board, in mid 2014, was largely dissatisfied with Charney’s performance and blamed him for the company’s financial woes. The bankruptcy deal that was recently filed includes a debt-equity swap that would essentially turn debt that American Apparel is having difficulty paying into stock that would give creditors much more direct control over the company.

Last July, American Apparel had announced that it would be eliminating $30 million in operating expenses over the subsequent 18 months. There was an investor takeover in December 2014. Workers have received pay cuts of up to 50 per cent since the takeover.

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