Details have emerged of American Apparel's new George Soros-backed credit line — and they do not look good for the company. American Apparel is swapping out a $75 million Bank of America line of credit for an $80 million loan from Soros' company Crystal Financial. For the privilege, its interest rate will effectively double. The troubled clothier, which has seen seven consecutive quarters of losses, cannot repay Bank of America when its loan matures this summer, so it has to accept the new financing — even though it was paying BofA the London Interbank Offered Rate + 4.5% interest, and will have to pay Crystal LIBOR + 9%. Founder Dov Charney takes a typically sunny view: "If we hit our numbers, then the interest rate won't matter." If. Not hitting its numbers (repeatedly), of course, is how American Apparel came to be paying 18% interest on the $116 million it owes its other main lender, private-equity fund Lion Capital. [WWD]
"The last few days, I didn't sleep at all. The night before Louis Vuitton, my fitting was at 3 a.m. and the call time was 5 a.m. Before the show, we were all passed out on the floor and tables after getting our hair and makeup done. Pat [McGrath] was coming around, saying, 'Don't sleep on the side of your face, you're going to mess up your makeup!'"
Fan Bing Bing
- Madonna says that Karl Lagerfeld's comments about Adele's weight — which he has already apologized for — are "ridiculous" and "horrible." Says Madge, "I don't like it when anybody says anything bad about anyone — I don't like it. Adele's a great talent and how much she weighs has nothing to do with it." [Mirror]
- At the third annual DVF Awards, Diane von Furstenberg awarded $50,000 grants to women working in public policy and non-profit-land to better their communities worldwide. Oprah was there, and so was Tina Brown, who said she had such a girl-crush on the designer "I even toyed with the idea of naming myself Tina von Brown for some time." One honoree was Panmela Castro of the Brazilian feminist art organization Rede Nami. Asked about Brazilian models, Castro said, "I'm a feminist, so I don't believe that modeling is healthy for women." Oh please. It's 2012. Can we ditch the ridiculous notion that modeling as a profession is somehow contrary to the principles of feminism? [DFR]
- Zara will unveil its massive Fifth Avenue Manhattan flagship — conveniently located right next door to competitor Uniqlo! — tomorrow. It paid some $324 million for the lease. [WWD]
- Speaking of Uniqlo: that Manhattan flagship, which opened late last year, is reportedly the design inspiration for the chain's newest Tokyo megastore. [Bloomberg]
- Because the fate of domestic manufacturing is a key topic in the current French presidential election campaign, candidates are scrambling to insure their t-shirts are French-made, so they can brag about them. [WWD]
- Tod's released a somewhat damning statement about the reported departure of its longtime creative director, Derek Lam. The company "confirms that the agreement between the parties is set to terminate on 30/9/12," but doesn't specifically state whether Lam's contract will be renewed. Tod's contines:
In the meantime, Tod's is in the process of evaluating its options, considering that, based on the company's future development plans, the role of the Creative Director of Tod's will be central and even more important. The choice will therefore be directed toward an individual with great creative talent and able to commit the necessary amount of time to the success of the brand.
That rather implies that Lam didn't, in Tod's view, "commit" himself properly — and/or that his efforts didn't translate to the desired level of financial success. Note the total absence of any "we thank Derek Lam for all his hard work." [FT]
- According to Tod's latest annual financial results, the company's doing pretty well: its profits rose 23.8% year-on-year, to $187.6 million. Overall sales rose 13.5%. [WWD]
- Need an Argentinian Harper's Bazaar like yesterday? This is New York-specific, but potentially very useful: Racked compiled an up-to-date guide on the best newsstands for buying hard-to-get international fashion magazines. [Racked]