Fashion giant American Apparel is preparing to file for its second bankruptcy in two years, according to Bloomberg.

According to sources who wish to remain anonymous, the filing could take place within the next few weeks and set the brand up to be bought out. 

Brand licensors Authentic Brands Group LLC and Iconix Brand Group Inc have reportedly expressed interest in acquiring the brand.

This comes after a difficult two years for the retailer, which came out of its previous bankruptcy at the end of January this year.

READ MORE: American Apparel loses second CEO in as many years

Aiming to turn around its finances, the fashion brand converted £189.4 million worth of bonds into equity, but falling sales and a damaged reputation following the ousting of its founder and chief executive Dov Charney have led to its current financial turmoil.

It was announced earlier this month that the brand’s new chief executive, Paula Schneider had quit the company to join DG Premium brands, having joined American Apparel in January last year.

Schneider took over from the company‘s founder following allegations of misconduct, and it is not clear whether her departure is connected to the company’s financial woes. 

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