The Origin

American Apparel Inc. is a North American clothing manufacturer, designer, distributor, marketer and former retailer based in Los Angeles, California. Founded by Canadian businessman Dov Charney in 1989, it was a vertically integrated company that ranked as one of the largest apparel manufacturers and marketers in North America.

The story of American Apparel started in North Carolina, US as a small wholesale business who had a commitment to deliver the best American-made t-shirt at an affordable price. The minimalism and simplicity of the design as well as the large and original range of colours set American Apparel as a leader in the wholesale business, and eventually also in the entire garment industry.

Brand Development

The American Apparel brand was created in 1989. Six years later in 1995, the brand launched its Classic Girl Line which opened the door to fashionable basics. The next year in 1996, it gave birth to 50/50 Raglan ¾ Sleeve T-shirt. In 1997, American Apparel arrived in Los Angeles. AmericanApparel.net was made live in the year 1999.

The brand reached its prominence in the 2000s. In 2001, the brand re-launched a new version of the original Fine Jersey Shirt as the 2001 Fine Jersey Crew Neck T-Shirt.

A couple of years later, American Apparel opened its first retail store on Sunset Blvd. in Echo Park, Los Angeles and launched its first body-suit, the Cotton Spandex Halter Bodysuit. In 2004, the brand went global and opened its retail stores around the world. The following year, American Apparel released many iconic pieces including the F497 Hoodie, the Cotton Spandex Legging, the Striped Athletic Socks and the Nylon Gym Bag. The year 2008 saw the brand bring back Disco style with the making of Disco Pants and Disco Shorts.

American Apparel brought back items that were inspired by vintage classic pieces in 2010 including the Riding, the Oversized Chiffon Button Up, the Pleated Pants, and the High-Waist Bikini Bottoms. The next year, the brand released its first Denim collection for men and women.

The brand produced a new collection of athletic-inspired pieces including the Tennis Skirt. In the year 2014, the brand brought back retro prints with the launch of Nathalie Du Pasquier collaboration. As of September 2015, American Apparel was trying hard to avoid bankruptcy as it scrambled to raise money to pay down US $15.4 million debt due in October, 2015. It was struggling to find funds as it prepared to report a torrid set of financial results in the coming weeks.

Communication

American Apparel designs, creates and prints its own advertisements. The company is known for its provocative and controversial advertising campaigns, which is largely the inspiration of the company’s former CEO Dov Charney.

According to Ad age, Apparel’s advertising ‘telegraphs the brand’ from person to person. Their print campaigns are widely considered to be some of the best in the industry. The sexually charged advertising has been criticized, but has also been lauded for honesty and lack of airbrushing.

American Apparel images often display subjects with their blemishes, imperfections and asymmetrical features highlighted and attached with brief, personal descriptions. Many of the models in American Apparel’s advertising are recruited from streets, or company stores; others are selected after sending their photos directly to the company website.

Environmental Policies

The company depends on environmentally friendly practices and is known for its innovations in sustainability due to vertical integration. American Apparel manufacturing system is designed around the concept of “Creative Reuse”—which converts excess fabric from one garment template into several additional garments such as bathing suit tops, belts, headbands, bows, bras, underwear and children’s clothing.

This otherwise wasted material reduces the amount of fabric the company needs to produce in addition to expanding its product line and saves approximately 30,000 pounds of cotton per week.

American Apparel maintains a bicycle lending program for its employees and according to People for the Ethical Treatment of Animals it is a vegan-friendly clothing company. American Apparel installed a 146-kilowatt solar electric system on its factory roof, designed to reduce power costs by at least 20%. These panels power as much as 30% of the factory.

Finance

At its peak, American Apparel’s revenue climbed to nearly $634 million in 2013 before the long descent. A little more than a year ago, American Apparel was acquired by Gildan Activewear Inc.

Gildan took formal control of Apparel in February 2017 and had a little more than one month to ramp up new production and then get the label in front of wholesalers and consumers again. In that first year, Gildan took in $50 million in sales. This year, the goal is to double sales to $100 million.

The Gildan Activewear Inc.’s total turnover for the year 2017 was $2.75 billions.

Current Situation

In January 2016, the brand rejected a $300 million takeover bid from Hagan Capital Group and Silver Creek. The investment firms are supporters of Dov Charney. In 2018 the US retailer has weathered a well-publicized storm over the past three years, which included the departure of founder and CEO, Dov Charney, and mass redundancies, followed by large-scale protests by its former workers.

Gildan Activewear Inc, the Canadian-American manufacturers bought the company for $88m in 2017.