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American Apparel on verge of bankruptcy

By Lindsay Cutler on Aug 20th, 2010  |  Comments (11)

In less than ten years, American Apparel has risen from that store where you can buy your fair-labor solids to a hipster retail behemoth. Considering sales and brand awareness has spiked in the last few years, it's surprising that their earnings have been so low.

Their last quarter's earnings - which were reported late, never a good sign - were the lowest in the company's history. They're now shouldering a debt of over $121 million in addition to its twenty-one percent stock plunge.

How exactly did this happen? Maybe it's bad hiring practices, poor management, the fact that everyone in corporate is expected to look like a floor employee, or because no one told them that The Elaine Benes is the new thing, but they're almost certainly on their way out.

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Comments ( 11 )

It's about time.
Meh commented on Aug 20 10 at 3:16 pm
I agree, it's about time. There's just no way a store that obsessed with having beautiful working for them at all levels of business can be successful.
whateves commented on Aug 20 10 at 3:24 pm
Plenty of designer stores have that beautiful people only provision and continue to do okay (last I checked???). American Apparel isn't a designer store, though. Their clothes are just ridiculous "basics" and catered to a passing fad. Their idea of keeping up with the times is by introducing assless hosiery. That can only get you so far on the trend train. Then there's, of course, the other crap they have on their hands. Whatever, hope they sink, toodle loo!
VS commented on Aug 20 10 at 3:49 pm
I think this is a sad development, firstly because they make the damn clothes here in the US, and secondly because their ads always amuse me.
GeeBee commented on Aug 20 10 at 4:30 pm
If you think American Apparel still makes their clothes in the US, go spend some more time on the internet.
pop commented on Aug 20 10 at 9:04 pm
And that, my friends, is the immigration debate in a nutshell. It's pretty much impossible to make any money making cheap stuff in the US unless you use undocumented immigrant labor. There is a reason why sweatshops exist.
No tengo papeles. commented on Aug 21 10 at 3:17 am
Am App is a fucking joke! I remember the first time I saw one of their adds, literally thought it was a fucking joke! I can't believe they actually made it as far as they did and CANNOT WAIT for the day I don't have to see their extremely distasteful adds anymore!!!
pcp commented on Aug 22 10 at 11:11 am
I'm not surprised--the public wasn't going to put up with uncomfortable, overpriced t-shirts modeled by drugged-out losers forever. To say nothing of Dov Charney's habit of sexually harassing any woman who got within grabbing distance. Good riddance!
hma commented on Aug 22 10 at 8:30 pm
So sad. Progressive types were so excited to finally find a decent quality clothing company that made their stuff ethically - then we all switched off once the ads and Dov Charney's reputation started getting known. They could have easily made a profit by taking the high road.
M commented on Aug 22 10 at 10:46 pm
Maybe if corporations didn't have to worry about how to fund health care for their employees and could instead focus on making quality products cheaply and locally, everyone would be better off?
N55 commented on Aug 23 10 at 12:29 pm
Oh noes! Whose clothing ads will I turn to for unexpected arousal now!?!?
Kogo commented on Aug 23 10 at 4:00 pm

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