The New York Post draws a sweeping picture of manifold problems. Most recent and pressing: shares of the company dropped 17 percent Friday after the company reported its profits were down 23 percent. Before you get too excited, the immediate cause is not dislike of the behavior and aesthetic of its highly visible founder— the Terry Richardson of mass retail. (But it might not be irrelevant!)
That immediate cause would be the financial clampdown by the private equity firm that took control from Charney last year, which it says is preventing it from investing further. But possibly the biggest culprit is the the immigration crackdown at American Apparel's Los Angeles factory, which forced the firing of 1,500 employees — most of them women — and left the company claiming a "loss in manufacturing efficiency." Their employment conditions (health benefits, on-site masseurs) were the flip side of the American Apparel narrative, otherwise marred by five sexual harassment lawsuits (none of which were proven in court.) Obviously, it's the one the company prefers be told.
As a result of all this, American Apparel has had trouble stocking its shelves in its 281 stores, where sales dropped 7 percent in the fourth quarter. It's not clear, though, how much of the drop can be attributed to the supply chain and how much of it is brand fatigue, a juncture in our consumer culture where American Apparel's selling proposition of grainy, pouty softcore and cotton-jersey frippery is no longer that novel. Perhaps the moment has passed. Not that any of this is any comfort to those 1,500 women and men who lost their jobs last year.
Earlier: "You Don't Feel Degraded In Any Way, Right?" Inside Pantytime At American Apparel
American Apparel Goes Bottoms Up
Everything You Didn't Want to Know About Dov Charney And Weren't Afraid To Ask