The Los Angeles based clothing chain American Apparel has questioned about its business existence because of the increasing trading losses and debts.

The US firm has said that its debt had increased to 120.3 million dollars. The firm has said there were certain doubts that the firm would be able to continue its business with such a kind of trade losses. The share value of the company fell down by 15% in the morning trading.

The shares had already fallen down by 55% of their value since the beginning of the current year. American Apparel operates more than 280 stores across the world and it owns 14 stores in the UK.

It has reported losses of around 7 million dollars in the three months till the end of June. In a statement the company has said that it was expecting the losses to continue even in the third quarter of the year. The firm has also said it was likely to breach its contract with its main lender, the private equity firm named Lion Capital. The company has been involved in so many controversies in the recent past.