In a closet packed with tank tops, blazers, faded jeans and business attire, by far my most comfortable piece of clothing is my bright red ‘Legalize LA’ American Apparel t-shirt. It’s one of the softest pieces of clothing I own. This is why when news broke on Twitter that the hipster clothing store might be facing bankruptcy my inner fashion sense felt distraught. It’s difficult to imagine a world where I won’t be able to shop for overpriced basics and admire the large helvetica typeface in Downtown LA.
The “sweatshop free” retailer is currently losing money at a rate of nearly $30 million a year and has accrued debts totaling $120 million. Moreover, American Apparel will also be facing investigation by the US attorney’s office in NY into why Deloitte & Touche, the company’s auditor resigned so abruptly this past July. Deloitte claims they found “material weakness” in the retailer’s financial controls.
The declared ‘progressive measures’ CEO Dov Charney has made towards the factory workforce, whom he pays up to $20 an hour with health and insurance and paid holidays may come to an end if the company files for bankruptcy. This will threaten the jobs of 10,000 employees in 20 countries around the world. However, the CEOs ‘progressive measures’ have been already been thwarted by the company’s production problems that occurred after a raid on its factor in 2009 by police which revealed 1,500 illegal immigrants- all of whom had to be fired.
It seems as though in addition to the illegal hiring practices and the CEO’s overly liberal demeanor and inappropriate behavior towards women (which has caused at least 3 sexual harassment lawsuits against him) American Apparel’s true downfall sprouted from their inability to adapt to the rapidly changing market.
The ‘Hipster Revolution’ which helped jumpstart the clothing company has dwindled in popularity in recent years and has left American Apparel without a strong consumer base. Charney has voiced his new strategy to target older customers such as fixed gear bicyclists. However, this new approach may be too late to reverse their current financial situation riddled with debt. Whatever lies ahead for the future of American Apparel, our LA graphic design company wishes them the best of luck. Your skinny jeans and neon Spandex will be sorely missed.