American Apparel had a series of deep-discount sale periods around the holiday season, before announcing on its website in January that it was moving all e-commerce operations to Amazon. A Gildan spokesperson confirmed that four American Apparel U.
The reason? That customer-choice experiment Gildan started when it relaunched American Apparel provided valuable intel about consumer buying patterns. Wyatt says the perception that lower-quality clothing gets made in China and other countries has flipped in recent years.
Advancements in production have put foreign manufacturing on par with American production, at least in the eyes of consumers. And shoppers are more willing to buy across borders — think Amazon alongside Alibaba. That confusion is evident in some of the Amazon reviews from self-proclaimed fans of the brand.
The change would not be a big deal, but the quality of this new shirt is so low, there are threads hanging out all over the seams. The situation is different for wholesale shoppers, who can still choose from eight of the U. But wholesale buyers are typically businesses who print their own designs on apparel or provide the service to other businesses. Screen Printers Have Other U.
Once he could begin to order American Apparel again, he noticed limited colors and reduced U. Over the next several years, American Apparel exploded into a chain with locations in 11 countries. Fast-forward to , and there were more than stores in operation. Too fast, says one former leadership level employee who asked to remain anonymous. The rents were high. We had about 15 stores in Manhattan alone at one point. With all this, there became a huge nut you had to crack every month.
The financial need was just enormous. While the retail store blitz was fundamental to turning American Apparel into a global brand, it eventually became a millstone saddling the company with an ever-increasing debt, they say. The rapid expansion, the positioning of stores in rent-expensive spots, putting too many similarly-merchandised stores close together in a city — all that made it challenging to generate the necessary sales levels.
And when productivity dropped, debt increased — and increased. The higher cost of U. Charney has dismissed claims that retail stores were underperforming or burdening the business, saying most were profitable prior to his removal.
The U. S manufacturing model was viable and strong, too, he says. Nonetheless, the company started taking on debt in , he has maintained, to address a productivity decline and the need for hiring and training new skilled workers following an immigration investigation that resulted in American Apparel having to release more than 1, employees. There was no doubt that American Apparel was dealing with debt. It was his heart and soul. He could always find a way to come up with more cash.
But he went to the well too many times — agreed to things where he lost power. It became very difficult for him. You could feel that the ship was sinking. It was run insanely. And sure, the live current of overt sexuality coursing through the imagery, sometimes criticized as pornography, helped electrify the appeal — at least initially.
But it was also a deal with the devil. It got us attention, but at the same time, it was a one-liner that would eventually get tired. And it did. Tastes started to change, and American Apparel failed to evolve its aesthetic to continue captivating core audiences, says Dave. Combine that with the fact that the company founder was the subject of legal actions related to alleged sexual harassment and other accusations of skeevy behavior, and the sexuality of the marketing content spurred a backlash, Dave maintains.
That was gone. That was not fun anymore. Couple that with some of the things Charney was supposedly doing and you get a real creepy factor. In a filing, American Apparel said two other sexual harassment claims by ex-employees were settled for confidential amounts.
Other allegations against Charney include that he physically and verbally abused workers, sent sexually explicit texts and emails to staffers, and that he used an American Apparel computer and network server to save images and videos of himself engaged in sexual activity with employees and models. For his part, Charney has long-asserted that any sexual activity that he did engage in was consensual. They went through years and years of private text messages from his personal telephone between himself and his friends, some of which involved amorous conversations that were consensual and welcome in nature.
That hurt sales. Beyond failing to progress past what may have been an increasingly problematic image, inadequate evolution could have hurt American Apparel on the product side too, former employees and analysts say.
Over time, Dave says the company strayed too far from creating new innovations in fashion basics — the lifeblood of what had made American Apparel great. It just got more bizarre. Sahir Anand sees merit in the argument that American Apparel got stuck and lost its way. American Apparel might also have been wounded by neglecting to adapt quickly enough to web-based buying trends.
Charney went on to start a new company called Los Angeles Apparel, which manufactures its products in the LA area. Los Angeles Apparel shares some qualities with the company Charney founded — it buys fabric and yarn made in the U. How did American Apparel go from fast-growing retailer to bankruptcy court? Watch the video above to learn the factors that impacted its bottom line.
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