Support for LAist comes from
We Explain L.A.
Stay Connected

Share This

This is an archival story that predates current editorial management.

This archival content was written, edited, and published prior to LAist's acquisition by its current owner, Southern California Public Radio ("SCPR"). Content, such as language choice and subject matter, in archival articles therefore may not align with SCPR's current editorial standards. To learn more about those standards and why we make this distinction, please click here.


American Apparel Plans To Close Stores And Lay Off Workers

American Apparel in Malibu (Photo by Eric Demarcq via the LAist Featured Photos pool on Flickr)
Stories like these are only possible with your help!
You have the power to keep local news strong for the coming months. Your financial support today keeps our reporters ready to meet the needs of our city. Thank you for investing in your community.

Struggling hipster brand American Apparel announced today that it is closing stores and laying off workers as part of a $30 million cost-cutting effort.

In the wake of nearly two dozen lawsuits from ousted CEO Dov Charney and successive annual losses, the downtown Los Angeles-based company is hoping that major cost cutting measures over the next 18 months will help keep them afloat. The retailer did not say how many of its roughly 10,000 workers would be let go or how many of its 239 stores would close. In April, American Apparel announced nearly 200 layoffs, with a majority of the job losses coming from the company's manufacturing operations in Southern California.

The company says it will close "underperforming retail locations" in "unprofitable and over-saturated markets," while it also plans to "look to add new stores in profitable fast-growing territories," according to CNN Money. Even if costs are cut and revenue increases, however, the company says there's no guarantee that it will meet funding requirements for the next 12 months without raising additional capital. Since 2010, the market value of American Apparel has plunged dramatically from $540 million to about $90 million.