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More gloomy news for UK retail as American Apparel's UK business enters administration

US clothing brand American Apparel’s UK operations has entered administration as KPMG are called in as administrators.

The assets of American Apparel (UK) and American Apparel (Carnaby), the businesses which run the clothing brand’s UK sites, will now look to be sold off across its 13 site portfolio.

The brand, which has eight outlets in the capital, has struggled in recent years as sales have slumped and losses have widened, resulting in its US parent company filing for bankruptcy last year.

American Apparel is now looking for a buyer, and KPMG warned that its UK brand was not part of the sale meaning it was likely to be wound down.

Jim Tucker, Joint Administrator and Restructuring Partner at KPMG, blamed ‘strong retail headwinds’ which have resulted in the Group stopping inventory shipments to the UK.

He said: “The UK business has experienced similar trading difficulties, resulting in the appointment of administrators.

“The 13 UK stores are well stocked and will continue to trade as usual in the lead up to the peak Christmas trading period. Whilst the UK business is not part of the US sale, a number of the UK stores are in prime high street locations, and we will also aim to sell individual stores following the Christmas trading peak.”

The news follows M&S announcement this morning that it is set to close around 60 UK stores as part of a scaling back of its clothing and homeware business.