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Struggling retailer American Apparel Inc. said Monday it has received a letter from the New York Stock Exchange Amex LLC saying it could be delisted if it does not file its second-quarter results in a timely matter.
The company has previously filed a plan of compliance with the exchange in June that said it would update the exchange by Nov. 15 about its plans to come into compliance. It also plans to file its quarterly report by that date.
Last week the troubled clothing chain said it might not have enough liquidity to sustain itself over the next year. It also reported a preliminary second-quarter loss and expressed doubt about its ability to continue as a "going concern," standard language foreshadowing a possible bankruptcy.
The delay in filing has been caused by the resignation of Deloitte & Touche as American Apparel's auditor after the accounting firm said it found material weaknesses in internal controls over financial reporting. Deloitte requested more information from the company to determine if there were problems in previous financial reports. American Apparel has said it is working to give Deloitte more informatin.
American Apparel has hired back its former auditor, Marcum. The Los Angeles-based company said Marcum needs more time to review procedures for the first two quarters of the year.
The retailer also said last week that it was subpoenaed by federal prosecutors in July as investigators at the U.S. Attorney's Office in New York sought documents related to its auditing. American Apparel said it was cooperating with the request.
Shares of American Apparel fell less than 1 cent to close at 74 cents on Monday.