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Is American Apparel losing its (neon) shirt because it ignored its core audience?

American Apparel American Apparel, the sportswear company proudly "made in downtown L.A." may be on its last legging-clad legs.

The global brand, founded by the famously outspoken Dov Charney, saw its stock fall 21.3% on Wednesday, ending at an all-time low of 81 cents, according to Los Angeles Times reporter Andrea Chang ("American Apparel's shares plummet 21% as doubts rise about its future").

Additionally, it failed to file its second-quarter earnings, and it's been subpoenaed by the United States attorney for the southern district of New York after switching accounting firms. 

This isn't the first time American Apparel has been in peril. Before receiving a cash infusion from a third party, Endeavor Acquisition Corp., through a reverse merger, and transitioning into a publicly traded company in 2007, the firm was nearing bankruptcy.

But teetering on the edge of disaster is apparently Charney's style. After going public, the founder and his new partners went into major expansion mode -- opening stores all over the world, despite the seemingly obvious dilemma of how to keep a company steeped in cotton jersey viable once the popularity of leotards and V-neck T-shirts drops off.

And certainly the brand's aesthetics have begun to feel a little stagnant over the last few years -- including its basement-porno advertisements, which have, at long last, completely lost their shock value.

But perhaps the brand's bigger failing is neglecting to grow the merchandise with the customer base that made it a smash in the first place.

American Apparel hit the big time in the early 2000s, ensnaring twenty-somethings with the very same edgy ads and louche tees. But those twenty-somethings are now pushing 40, and they've moved on from harem pants and unitards.

No big deal -- the brand should hypothetically be connecting with the next generation of night crawlers.

But a recent glance at the brand's website showed the merchandise mix to be steeped in supreme novelty. Sheer pencil dresses, '80s one-piece swimsuits, mesh half-shirts, scrunchie-style hair clips. Where are the basics that made American Apparel a go-to for casual wear throughout the last decade?

Well, they're still there -- even the beloved solid-colored V-neck tee. But you have to hack through a wall of irony to get at them.

-- Emili Vesilind

Photo: New looks from American Apparel. Credit: American Apparel


 
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I'm a little confused — AA hit it big in the early 2000s, which was about 10 years ago, and the 20somethings who loved it then are now pushing 40? Did they magically age 15 years in less than 10? This makes no sense, and is completely misleading. Also, I think 30somethings still like socks, tshirts, and underwear, the staples that ground the company. Just because they also sell unitards and sheer bodysuits doesn't mean their original customer base has rejected them as a whole. This is just broad speculation, not research-based reporting.

Good riddance to American Apparel and Dov Charney's illegal alien-only hiring practices.

I always made it a point to avoid their stores.

I used to love their shirts, but who can wear gold lamé hot pants past their teens?

Still great clothes

American Apparel is dead. They don't hire black people. They are racist... In China the consumer is #1 that's why an American Based Designer brand like American Apparel can't hold up.

Emili - GREAT last line!

AA is so ubiquitous it lost its appeal. Might as well be Gap

Saying the twenty-somethings from the early 2000s are now pushing 40 is a bit much...

"American Apparel hit the big time in the early 2000s, ensnaring twenty-somethings with the very same edgy ads and louche tees. But those twenty-somethings are now pushing 40..."

9 or 10 years later and a 21-year-old is now pushing 40? Basic math fail?

It seems every style, culture, and finance writer is having a snarky ball at American Apparel's near-demise. Say what you will about their clothes, their CEO, their ads, any of it .... the fact remains that they are a major employment force in Los Angeles, and they pay much fairer wages than comparable jobs in the City. If they have to close their doors, a lot of this city's most vulnerable people will be the ones suffering. But the lives of the workers aren't much fun for the style, culture, and finance beat, so it's not the focus (or, as here, it doesn't even get a mention). Maybe you can phone Steve Lopez to cover it once they all lose their jobs.

Not necessarily a basic math fail - someone who was 27 in 2000 would be 37 now...I would consider that "pushing 40"

AA was a nice brand and as a former employee, can say its employees were very committed to the success of the company. The company is profitable, though not profitable enough to withstand over-expansion and the multiple lawsuits brought against it. Like Matthew said earlier, it would be a huge loss of employment to downtown LA. I am disappointed to see it doing so badly. There are talented and dedicated individuals whom I had the pleasure of working with at that company. Hopefully, the brand can be sold and the doors kept open by a different company.

Good riddance! Their clothes are flimsy, ugly, overpriced, and made for women who are 6 feet tall and weigh 100 pounds. And their ads are offensive. I've never heard anything good about them. Guess the hipsters lost interest too.

as imperfect as that company is, we need manufacturing in the US - so what if they have non-caucasions working there - its still better than made in bangladesh and china - they pay TAXES guys! it should be saved somehow. the tax base is shrinking here in CA - this is one of the worst states to do any business in - we cannot exist being a state of waiters and other service only companies. the middle class - what's left of it - and their children belive they are entitled to a PHD for free - somebody has to do the work, somebody has to be productive to pay taxes so out of state students and forigen students can take advantage of what was the best college system in the world.

Good riddance.

Dov is a total sexist that has sexual harrased his clients and employees. The clothes in my opinion are distasteful and i event live in the mecca of hipsters they [[AA]] tends to cater to.

Nice post, Matthew; I agree wholeheartedly.

So many people seem to be indulging in a bit of particularly unfortunate schadenfreude. American Apparel is a clothing manufacturer, the largest one still operating in the U.S., employing 1000s of people in downtown Los Angeles, a city wracked with unemployment, debt, and a moribund industrial sector.

Additionally, American Apparel pays its employees a living wage and provides its employees health and retirement benefits that surpass those of most white collar Americans.

The loss of American Apparel will hurt Los Angeles, both economically and socially. Regardless of your feelings about their aesthetic or their CEO, the loss will hurt our city. That should not be celebrated by anyone who cares about Los Angeles, and it should not be mocked by our newspaper of record.

Please leave the disdain to the self-congratulatory, self-righteous blogs.

Bill: those foreign and out-of-state students are the only thing keeping the UC afloat. There is a reason that the university has been recruiting them so aggressively while also raising their tuition.

Every non-resident student at UCLA brings in approximately $30,000-$45,000 more to the university in fees alone every year relative to a CA resident student.

It makes no sense to import Mexicans, Salvadorians, etc. to make clothes at 'American' apparel or anywhere else in LA. Those workers cost more in taxes than they pay, esp. considering education for their children (who wouldn't be here if not for cheap labor jobs at places like AA). Immigrant Dov Charney might make a bundle, but the rest of us are subsidizing his production force.

AA has been in LA for decades... There has 'never' been anything unique with their clothing line. You are all just victims of fashion! I'm 48, still out dancing, look great, and stay in shape. The poor attitude towards AA is not SoCal. The attitude is based on fat, flabby, lazy, unattractive poeple, bitter about those of us that work hard to stay healthy and still enjoy young activities. Don't be victims, stop stuffing your face, wash your hair, and get some sun on those pig ankles and fat feet...

Wanna know why American Apparel is failing? Its because of the rise of cheap faux designer companies like uniqlo, H&M hell even Zara. AA has always overpriced it's basic jerseys and v necks at $30-40 dollrs when I can get the same thing at H&M for $5 bucks. Maybe Charney you should stop sleeping with all your billboard models, do away with the "Made in LA" bs that you use to justify your inflated prices and realize that being fashionable does not necessarly mean you have to pay outrageous prices. Today's consumers are much thriftier, more price conscious. Nowadays its cooler to find something unique at a flea market instead of a flavor of the week ensemble that you charge at your store for $100 bucks. AA doesnt understand that and that's why theyre failing. Ive shopped at AA but never bought anything from them because of their ridiculous prices. Maybe now you realize im not the only one who feels this way.



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