NEW YORK (TheStreet) -- Shares of American Apparel (APP) are up 4% to $1.04 in pre-market trade after it was reported that the company has been approached by Irving Place Capital about a possible takeover, sources told the Wall Street Journal.
Irving Place sent an expression of interest to the board of the Los Angeles retailer in the last few weeks, the sources said. The board initially rebuffed the approach because the indicative price was too low, they added, according to the Journal.
Irving Place has since increased the price range to $1.30 to $1.40 a share and the board has yet to respond to the second approach, sources said.
The news which was first reported by the New York Post.
The takeover approach came before the board this week officially terminated the employment of founder Dov Charney, who was suspended as president and CEO by the board in June for alleged misconduct. Paula Schneider was named to succeed him as CEO, the Journal noted.
American Apparel has struggled with falling sales and swelling losses. In the three months through Sept. 30, the company lost $19.2 million, compared with a loss of $1.5 million a year earlier. Sales fell 5% to $156 million from a year earlier.
TheStreet Ratings team rates AMERICAN APPAREL INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation: