American Apparel Inc. has reached an agreement with creditors for a $90 million asset-based infusion, averting default. The company’s cash and revenues have deteriorated immensely, due to which, sustainability of the business is quite hard.

The clothing brand has been struggling for some time, and news it’s nearing collapse came as American Apparel reported a net loss of $19.4 million for last quarter. American Apparel (NYSE: APP), which has a second Wisconsin store in Madison, attributed the declines to unfavorable foreign exchange rates, store closures and the lack of new spring and summer fashion lines. The downward trend in financials is likely to be a warning for shareholders and investors that have a stake in the company.

The clothing maker has been in turmoil since it suspended and then fired founder and Chief Executive Officer Dov Charney for alleged misconduct. Moreover, the former CEO sued the company over his removal and claimed that the allegations against him are baseless.

Shares have fallen 87% and American Apparel is saying that it looks like it may have to consider shutting down altogether. Considering the downfall, Wall Street predicts that there is less chance for American Apparel to avoid bankruptcy.

American Apparel appears to be on the brink of bankruptcy, according to a regulatory filing from the company. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.

As of June 30, the company had $6.8 million in cash, $38.4 million outstanding on a credit facility with Capital One, and $6.1 million of availability for additional borrowings.