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American Apparel board asked to explore sale

the board of clothes retailer American Apparel has received a letter from British buyout firm Lion Capital, pushing it to explore strategic options include a sale, a source familiar with the situation has said.

The letter also said that Lion Capital would nominate Lyndon Lea, one of its founders, to the clothing retailer's board of directors. Lion Capital, a former lender to the retailer, has the right to nominate two of American Apparel's nine board seats.

Lion Capital also has warrants to purchase up to 12pc of the retailer.

The letter 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.

DEBT

Irving Place Capital has put in a bid for the retailer for up to $1.40 a share, an offer that American Apparel's board believes is far too low, Reuters has reported.

The Los Angeles-based company, which has a shop on Dublin's Grafton St (pictured above), has recently been bogged down by debt and investigations into the conduct of former chief executive.

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