What this means for American Apparel
Photo by Flickr user informatique
All over the breaking news for the last day was the news that a certain beloved/reviled clothing company might just be closing its doors soon. American Apparel is apparently $120 million in debt, and the last two years alone, their stock has declined from, at the strongest, $14 to a mere 75 cents this past Friday. It’s somehow impossible to bring American Apparel without bringing up their notorious ad campaigns, which follow closely to their founder’s, Dov Charney, ideals of nubile young women in tees and spandex. Still, now that this association has been made, we can safely ignore it in favor of what’s actually going on.
American Apparel has traditionally been the shirt of choice when making an attempt to avoid sweatshop and exploitative products. They pay well above minimum wage in their factories, and provide health insurance and paid holidays. In the past, AA’s un-globalized structure has allowed them to be flexible, and react to market changes in a way that larger businesses can’t. But the structure that allowed them to be flexible is pretty much their undoing, as they expanded much larger past what they were able to handle.
It doesn’t help at all that Charney has declared the hipster trend “over.” Still, is it likely that AA is totally doomed? Maybe. It’s doubtful that they’ll shut down right away, or even within the next year or so, but unless they change their tune (say, start to promote a wholesome American image, or go in a completely different style, or maybe a hostile takeover by someone who knows how to handle a large company), they may have a slow decline over the next 5-10 years. Thoughts?
