With clothes made in downtown Los Angeles, indie fashion manufacturer American Apparel is about to be sold for $382.5 million to a "little-known" investment firm.
The New York Times reports that the company, founded by the always entertaining Dov Charney, will announce its sale tomorrow. The new owners? Endeavor Acquisition Corporation, owned by Jonathan J. Ledecky, who will keep Charney on as CEO.
The sale is almost as surprising as the history of American Apparel, a company that only started three nine years ago. In a market seemingly saturated by the Gap, Urban Outfitters, and Old Navy, American Apparel appealed to a younger crowd who enjoyed the highly sexualized advertising and hip stance.
Run more like an Internet start-up than a sweatshop, American Apparel boasted average hourly wages of over $13 an hour, healthcare, and a variety of benefits ranging from free bus passes to free ESL classes to on-site masseurs. They were even the beneficiary of PETA's Libby award for Best Vegan-Friendly Clothing Company of 2006
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The formula is: make cheap t-shirts, have porn stars model the t-shirts, sell the t-shirts for $20/ea
Their models are/were not porn stars -- if they were all the girls would be at least a D-cup. Some of 'em are even their retail employees. I never bought their stuff unless it was band merchandise, but one thing I did respect in their marketing is that they used "models" who were normal shapes and sizes.
Charney is an oddbaall, but I like to think some of his success comes from an appreciation for how he treats his employees (other than the harassed ones.)
Made in America, by well paid employees. That speaks to a lot of people. This deal spells the beginning of the end of that, I predict.
i always felt they had the most non attractive models ive ever seen. and im down with normal shapes and sizes as long as theyre cute.
but, hey, were all beautiful people right?
i always felt they had the most non attractive models ive ever seen. and im down with normal shapes and sizes as long as theyre cute.
but, hey, were all beautiful people right?
Ah. The Hooters of the sweatshop-concious retail clothing industry.
Founded three years ago?
"American Apparel, founded in 1997 in Los Angeles, quickly became a retail sensation, with 145 stores and Gap-like ubiquity with seven stores in Los Angeles and 15 in New York City."
He sold just in time. Watch how the company will slowly go down hill from here. If he would have kept it, it only would have gone down slower. A bit over priced compared to other companies.
Here's a hearty second to the poster who said Dov Charney was right to sell the company now. It's an incredibly smart business move.
Charney is cashing in at just the right time. American Apparel has opened too many new stores in the past couple of years for it to retain its caché as a hipster uniform. The company has saturated a market it expanded/helped invent, and American Apparel will need a cash infusion for the brand to expand and remain a profitable mainstream retailer. With new corporate ownership I wouldn't be surprised to see the company undergo an image overhaul, not immediately but a ways down the road. I wouldn't be surprised if one day American Apparel is ubiquitous, mainstream and corporate as The Gap.
Another thing... most people either don't know or forget this: a significant chunk of American Apparel's profits come from its contracts with the United States military. It's true. The U.S. armed forces are required to buy all or most of their apparel from companies who manufacture their goods right here in the good old U. S. of A, and American Apparel is one of the few American clothing companies who hasn't outsourced or subcontracted their manufacturing to third-world sweatshops.
While Charney has promoted an image of himself and his company as iconoclastic and anti-establishment, he is in fact a savvy businessman who's more than willing to get into bed with the most rigid tools and institutions of "the establishment." (Please feel free to add your own pun about "getting into bed" with his employees.)