Struggling American Apparel Announces Store Closings and Layoffs

Illustration for article titled Struggling American Apparel Announces Store Closings and Layoffs

The latest in American Apparel’s retail struggle is that the company is shutting down several of its U.S. stores and laying people off as part of “cost-cutting measures.”

These “initiatives” are an effort to chop $30 million in spending in the next year and a half, partly to combat a series of lawsuits from fired CEO/founder Dov Charney, who’s currently under a restraining order.


In a press release Monday, American Apparel referred to Charney’s lawsuits as “meritless” and said they plan to “pursue remedies against Mr. Charney for his actions.”

In place of some of its old, dead locations, the company plans to add new and improved stores in stronger markets:

Among other initiatives, cost-cutting measures will include closing underperforming retail locations to drive productivity improvements. In connection with these store closures, the Company will streamline its workforce to reflect a smaller store footprint and general industry conditions.

There have also been recent attempts to revitalize American Apparel’s ad game.

CEO Paula Schneider says, “Our primary focus is on improving the processes and product mix that have led to steep losses over the past five years. Our customers, employees, and local communities around the world believe that American Apparel is an iconic brand that deserves to succeed. My job is to make that a reality.”


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They have been trying to streamline the thing for years. Back in late 2013 managers and coordinators were told that there was going to be a lot of reshuffling. The main part of the cuts would go to the inventory teams. Each store in NYC at least had at least 5 employees who pretty much worked full time to tend to the inventory needs of the store. We were told they were going to eliminate most stores backstock and have 1 store be the “inventory room” for about 3-4 other nearby stores and only keep the best employees. The rest of the employees would be “recategorized”. There were about 5 bike messengers who would then take clothes store to store as needed along with 3 truck drivers. One of the things that hinged on though was American Apparel tightening up their shipping from LA which was constantly having issues.