Faruqi & Faruqi, LLP Is Investigating American Apparel, Inc. On Behalf Of Its Shareholders

NEW YORK--(BUSINESS WIRE)-- Faruqi & Faruqi, LLP, a leading New York securities firm, is investigating the Board of Directors and Officers of American Apparel, Inc. (“American Apparel” or the “Company”) (AMEX: APP). The investigation focuses on possible breaches of fiduciary duties by the Board of Directors and/or Officers of the Company in connection with the Company’s alleged illegal hiring practices and allegations that the Company may have issued materially inaccurate statements to investors concerning its 2009 financial results.

In July 1, 2009, American Apparel announced the receipt of notifications from U.S. Immigration and Customs Enforcement notifying the Company that based upon its review of government databases, approximately 1,600 current employees did not appear to be authorized to work in the United States. Then, on August 17, 2010, American Apparel announced that the Company expected to report a loss from operations of $5 million to $7 million in the second quarter of 2010 on net sales of $132 million to $143 million, citing “lower labor efficiency at the Company’s production facilities in the second quarter of 2010 compared to the prior year period” that was “primarily a result of the hiring of over 1,600 net new manufacturing workers during the second quarter of 2010.” In addition, on March 31, 2010, American Apparel revealed that its auditor Deloitte & Touche LLP (“Deloitte”) identified material weaknesses in American Apparel’s internal controls over financial reporting. On July 28, 2010, the Company announced that Deloitte had resigned and that the Company’s 2009 financial statements may not be reliable.

Faruqi & Faruqi, LLP is a national law firm which represents investors and individuals in class action and derivative litigation. The firm is focused on providing exemplary legal services in complex litigation in the areas of securities, shareholder, antitrust and consumer litigation, through all phases of litigation. The firm has an experienced trial team which has achieved significant victories on behalf of the firm’s clients.

If you own common stock in American Apparel and wish to obtain additional information, please visit us at http://www.faruqilaw.com/americanapparel or contact Juan E. Monteverde, Esq. either via e-mail at jmonteverde@faruqilaw.com or by telephone at (877) 247-4292 or (212) 983-9330.

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CONTACT:

Faruqi & Faruqi, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Juan E. Monteverde, Esq.
jmonteverde@faruqilaw.com
Toll Free: (877) 247-4292
Phone: (212) 983-9330

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