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The American Apparel Factory Might Leave L.A. Because Of The Minimum Wage Hike

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(Photo by Dennis Yang via the Creative Commons on Flickr)
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American Apparel is looking to move its L.A. headquarters to another state because of the new wage hikes in California, sources told the The New York Post.

Currently, the clothes maker has a lease with its downtown location that will end in 2019. Sources say that the company is looking to move this facility to another state with a minimum wage that is lower than California's. North Carolina and Tennessee were cited as possible locations—both states have a minimum wage of $7.25. L.A., as well as the state of California, will be raising the minimum wage incrementally until it hits $15 in 2020.

American Apparel has been scaling back its operations recently. Earlier this year, it closed a dyeing factory in Hawthorne, reports the L.A. Times. Another facility in South Gate has shut down its denim department. And workers at a knitting facility in L.A. have received a notice from the company saying that the factory will be closing in October, and that 50 employees are expected to be let go. Now, the word is that headquarters will be on its way out, though the Times has spoken to a source who said that the company will keep headquarters—along with the company's design team—in the Southland.

Regarding the claims that the L.A. factory will be moved, the company said in a statement that it "does not comment on rumors or speculation."

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American Apparel has been beset with troubles for the past few years. In 2009, the company fired 1,800 of its workers after an immigration inspection discovered that those employees did not have valid documents at the time of their hiring. Founder Dov Charney was later ousted because of misuse of company money, as well as his atrocious behavior towards employees. And when the company filed for bankruptcy in 2015, reports said that it was over $300 million in debt.

Trump supporters still have love for American Apparel, however.