US clothing chain American Apparel is to rearrange its management board in a last-minute deal to turn the company around.

Five out of seven members of the company’s board will step down, including the company’s founder Dov Charney, in return for an immediate loan of $25 million (£14.6 million) from the company’s largest investor Standard General.

The last few weeks are understood to have been particularly difficult for the firm, which has been loss making since 2010. At the end of this month, FTI Consulting will submit its findings in an investigation into allegations of misuse of corporate funds and sexual harassment against Mr Charney.