American Apparel Success Story

Name : American Apparel
Founded : 1989
Founder : Dov Charney
CEO : John Luttrell
Industry : Fashion & Retail
Sector : Public
Country : USA
Website : americanapparel.net

American Apparel’s 21st Century Manufacturing Miracle. Not many clothing companies can proudly state that their products are designed and manufactured entirely in Western counties, far from the sweatshops that are frequently associated with the textile industry. American Apparel, a modern fashion company based in Los Angeles, California, is one of those few, proud companies.

Founded in 1989 by Dov Charney, a Canadian with an interest in vintage American clothing, American Apparel was initially a clothing importer and screen printer. The company’s limited product line included t-shirts that mixed vintage designs with a strong sense of proportion, making them popular with early company supporters.

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In 1997, American Apparel moved to Los Angeles and started producing its own garments using a ten-man factory under the Interstate 10 freeway. Years of hard work as a wholesale manufacturing company allowed the company to purchase its current factory and headquarters – a giant building in Central Los Angeles.

american apparel

As the years went by, American Apparel grew more and more, producing its own clothes internally and marketing them in mere weeks. Due to the company being based in Southern California and refusing to use foreign labor, American Apparel responded to fashion trends faster than its rivals, giving it a competitive advantage.

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Thanks to its ‘Made in the USA’ branding and commitment to social issues, such as the Legalize LA and Legalize Gay campaigns, American Apparel grew into one of the top youth brands in America. The company courted controversy by using wild and crazy advertisements, often featuring near nudity, to generate publicity. However, while the company continued to grow, the business’s financial backbone was becoming somewhat strained. In 2010, the company ran into serious financial issues, with auditors for the company resigning after declaring that it may not be able to provide reliable information. 

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Charney, the company’s founder, doubled down on his involvement in the company, buying additional stock in the company despite its financial issues. It seems that his decision was the right one, with American Apparel now occupying one of the highest spots in the American mid-priced fashion industry.

american apparel headquarters

Now a major international brand, American Apparel is a rare example of first world manufacturing beating out competition from cheaper countries. While the company can’t compete on the price of its labor – it prides itself on paying all of its employees above-market wages – it competes instead by providing incredible efficiency.

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American Apparel’s financial issues could have killed the company, but it soldiered on and stuck to its core principles: providing fantastic clothes made with American labor at a price that doesn't shock or offend customers. That focus allowed it to fight its financial issues head on while gaining even more praise from its customers. Many analysts predicted that American Apparel’s innovative manufacturing model couldn't compete with cheap international labor. By all accounts, they appear to be wrong. From its edgy image and popularity amongst the nation’s youth to its fashion forward yet affordable designs, American Apparel is a rare and unique success story.

Dov at The ASI Power Summit

ByAlicia Mathew

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