American Alarmism

This might just be me, but hasn’t it felt like it’s been forever since American Apparel said that they were closing? Imagine my surprise when I walked past the Evanston location last week to see that they were ACTUALLY closed.

American Apparel has been playing a game of the boy who cried wolf, hype-ing up their closing  for years. After just a bit of research, it looks like the company has had it coming for a while. The company has been in the news for advertisements that objectify women and risky business choices by Dov Charney, the founder of the brand. Let’s take a stroll through the rise and fall of this popular brand that’s pretty much seen it all.

1997 - Dov Charney settles in Los Angeles with a wholesale model for producing and selling t-shirts. Charney’s goal? To provide better working conditions for his employees--paying them twice minimum wage--while also providing quality products. Charney dropped out of college to pursue the venture full-time. He got funding for the start-up by a loan from his parents.

2003 - American Apparel opens its first store in Echo Park, LA.

2004-2005 - The New York City and Montreal stores open following the LA branch’s success. By the end of 2005, the company had opened 65 stores internationally and received ample criticism from business experts who thought that the company was expanding too quickly.

2004 - The “Meet Sophie” ad makes waves. The ad features a young woman with a view from below her, with an obvious visual on her cleavage. According to the advertisement, Sophie met an American Apparel employee on the street in Montreal and was photographed the following evening. American Apparel was best known for  NSFW, explicit ads used to promote the most basic items from socks to t-shirts. Usually, this involved the cliche objectification of women. This eventually became pretty problematic especially since  one of the brand’s founding values was ethical treatment of employees.

2005 - 3 sexual harassment lawsuits target the brand’s image, with one suit dismissed. Female workers speak up and say that Charney creates a hostile work environment.  

2005 - The “safe to say she loves socks” ad appears in magazines and flyers for the first time. The ad features a young woman sitting, wearing nothing but knee-high crew socks. Again, not sure why this was necessary.

2008 - On August 15, American Apparel decides to speed up expansion plans after enjoying a 39 percent increase in growth, regardless of a weakening economy.

2009 - On March 19, American Apparel receives an influx of cash from British investment firm Lion Capital. American Apparel is now in debt from last year’s expansion and tries to save itself. During this year, Charney also decides to mandate that all employees who are deemed “unattractive” should be fired.. Charney requests that all  job applicants include a full-body, head-to-toe shot of themselves in order to uphold the ‘attainable, attractive’ standards that were propelled by his brand. He also mandates that every staff member be photographed so he could monitor employee-brand consistency. So much for good working conditions, huh?

2009 - On May 18, the Woody Allen catastrophe occurred.After using unauthorized photos of Allen from the movie “Annie Hall” on billboards, American Apparel was forced to pay $5 million to the actor.

2009 - On July 2, 1,500 undocumented workers were found to be employed by American Apparel. The company outspokenly voiced support for immigration reform. By September, all of these people were fired by American Apparel.

2010 - Stocks plummet after growing concern that American Apparel will be unable to sustain business. By August, shares are less than a dollar, the lowest in the company’s history.

2011 - In August, a former American Apparel employee accuse Dov Charney of sexual assault during what she believed was a “hiring interview.” Within a month, American Apparel must take on another economic lifeline from Canadian investors of $45 million to keep the company afloat and prevent bankruptcy again.

2014 - In March, The New York Stock Exchange reports that American Apparel has not reached the standards to be publicly traded in the NYSE. As a result, American Apparel says it will delay releasing its financial reports.

2014 - On July 18, the American Apparel board kicks Charney out of the company after sexual assault allegations continue. He fights against the board for the rest of the month by soliciting the voting power of shareholders to keep him in the company. He also tries purchasing additional shares of the company to increase his odds of keeping his job. In the end, it is decided that Charney will remain as a paid consultant.

2015 - In January, Paula Schneider is brought in to turn the business around. She is hired to bring a more female-positive approach to the business, producing ads like “Hello, Ladies” to turn away from the company’s infamous objectification. “It doesn’t have to be overtly sexual,” Schneider said. “There’s a way to tell our story where it’s not offensive. It is an edgy brand. And it will continue to be an edgy brand.”

2015 - On October 5, American Apparel files for chapter 11 bankruptcy, meaning that the clothing store could still operate without having to liquidate all assets and pay back debtors. This could be why it takes so long for them to actually close their storefronts. In fact, chapter 11 bankruptcy allows for the business to restructure or reorganize the business in hopes of future success because it could be economically efficient to allow a troubled company to continue running, cancel some of its debts, and give ownership of the newly reorganized company to the creditors whose debts were canceled.

2016 - In November, the company files for bankruptcy for a second time. They plan to close stores in Chicago, Washington, D.C., Seattle, Atlanta, Dallas, Memphis, Tenn.,Santa Cruz, Calif., New York, and Burlington, Vt. 

2016 - In December, American Apparel stores in the Chicagoland area close, including the Evanston location, in order to prepare the company for auction.

2017 - On January 9, Gildan wins the auction bidding of American Apparel for $88 million. The company plans to use the facilities and stores of the AA brand to expand their own onshore production facilities and storefronts.

In the world of fashion and weekly store updates, American Apparel’s business model couldn’t keep up (on top of scandal after scandal, provided by Charney). Their main competitors were places like Zara and H&M, where they employ overseas garment workers to make clothing in a faster and cheaper manner. H&M has the advantage of staying on trend by making smaller batches of trendier clothing because they weren’t constrained to the same working standards that American Apparel placed upon themselves. American Apparel focused on larger batches of more basic pieces to balance the budget, but still fell short.