The fate of American Apparel has reached the final straw following a series of downturn events spanning the past couple of years. After filing for Chapter 11 bankruptcy, plans to turnaround the retailer never culminated, derailed by highly publicized disputes with founder Dov Charney, deep-seated debt, not to mention the changing consumer and retail landscape.
Last week, Canada’s Gildan Activewear announced that they would be acquiring American Apparel’s worldwide intellectual property rights and select manufacturing equipment, via a cash bid of approximately $88 million placed at a Bankruptcy Court-supervised auction. Gildan will also be purchasing select inventory, stating via press release that “the company [will integrate] the brand within its Printwear business;” however, no retail assets will be purchased.
Resultantly, on Monday, thousands of American Apparel employees were laid off, seemingly with no severance, final paychecks, and termination letters; thereby, inciting chatter of impending closure of 110 stores and US operations.
From inception, the brand has been a well-known hotbed of controversy, with extreme supporters and extreme lovers. That being said, the legions aspiring to turn around the fledgling retailer were never missing: be it Charney’s attempts to maintain a foothold or get back in, or the outside experts called in to apply a more textbook system of operating.
It is easy to wax poetic with an homage to the brand: built on the “Made in the USA” premise of employing workers domestically, providing “Sweatshop Free” working conditions and offering fair wages, capturing the LA aesthetic and dispersing it nationwide, then ultimately played an instrumental role in characterizing the hipster stereotype. The brand helped define many a wardrobe: easy to wear, versatile pieces most could integrate into creating whatever look he or she desired.
Seemingly trivial, considering the hundreds now unemployed, is where to turn to purchase affordable basic wardrobe staples. However, the hoards of brand fans and advocates remain strong, as we’re sure many are waiting for clearance markdowns (currently the entire site is 40% off, and their online factory outlet offers many dirt-cheap deals. According to the LATimes, expect to be able to shop in store and online until April 2017.
It would be interesting to shift focus towards founder Dov Charney, who launched a new business, titled Los Angeles Apparel Company. The venture is flocked by a website titled “That’s Los Angeles.” While little is known, aside from the bare-bones website featuring a montage raw and authentic images of Los Angeles, announcements and various vague teasers have declared this will coincide with a new apparel line. The site states, “Charney will be launching a new business in the near future. The sprit of the business will be based on his personal connection to Los Angeles, its people and its future. Los Angeles, for Charney, is where art, commerce, manufacturing and craftsmanship come together in a unique way unlike anywhere else in the world.”
Controversies and “he said/she said” mentality aside, one must realize that no company grows and develops to levels Charney’s achieved without a level of passion exhibited by the founder, compounded with those who join forces along the way. Charney loudly crusaded from the sidelines, going far as to even be brandished with a temporary restraining order in June of 2015.
Therefore, when news hit, it is unsurprising that Charney was back outside the factory, on the streets with former employees, taking to social media, and basically live reporting via Facebook.
His Instagram offers a eulogy of sorts. The exasperated messaged reiterated the claims he has made over the course, stating on Instagram: “There was so much emotion yesterday at the final moment of the previous company I founded. Thousands of workers most of whom gave on average 10-15 years to the company were thrown onto the streets. This was not because the company wasn’t doing well when I was running it. The company was performing. Millions of people were shopping at our stores and we were earning hundreds of millions of gross profits each year. This was because of Wall Street corruption that involves reckless hedge funds like Standard General and Goldman Sachs. The facts are the company was generating earnings and sales and paying workers well. Then I lost control of the company. My team was systematically fired and within a few seasons the company fell apart.” The commentary coincided with a photo of Charney and former employees, “Here are a few faces I wont forget, and I will work 7 days a week for the next few years trying to hire them again.”
However, those barring Charney from American Apparel may have unknowingly done him a favor: a silver lining providing him the platform to start over. If Los Angeles Apparel Company turns out to be what it likely has the potential to become, it could be greater than American Apparel, if free from the hard lessons or mistakes, and battles endured. Hopefully this next venture will maintain the manufacturing ethos on which American Apparel was originally founded and brand fans will follow suit.