American Apparel Faces Bankruptcy, Dov Charney Speaks

Hipster clothier American Apparel is on its way to bankruptcy, WWD reports. American Apparel, Inc. announced that both weak business and loans "raise substantial doubt that the company will be able to continue as a going concern" and that "the company may not have sufficient liquidity necessary to sustain operations for the next twelve months."

American Apparel's second-quarter losses will be somewhere between $5 million and $7 million after a terrible first quarter. According to the New York Times, shares in American Apparel have fallen more than 66 percent over the last year and that overall, the company has more than $91 million in debt. The SEC is threatening to de-list American Apparel from the stock exchange if it doesn't file its quarterly reports by Tuesday. Jezebel got in touch with CEO Dov Charney Tuesday afternoon to see if the results were filed and he responded, "I couldn't tell you."

Charney also spoke with BusinessWeek.com at the beginning of the month. He said, "A lot of assumptions that I grew up with are no longer reality. Those were things that we could rely on: that lenders will always be there, that they'll behave ethically and they'll always have money, that you can trust that as the sun comes up the consumer will be healthy, that we'll always be close to full employment in developed nations. Now there are no certainties."

In any case, Charney--and American Apparel--are moving away from "hipsterdom." He spoke with the Village Voice, remarking, "Hipsters are from a certain time period. The stereotype of a hipster is not something people aspire to anymore. Do you want to be a hipster? Nobody wants to be a hipster." The company is moving toward a preppy aesthetic, Charney said, explaining, "It's hard to put into words--it's about emphasizing products that we have. Our pieces are timeless."

Read more from the AP.

Comments

[Spikelee3000]

02:27 PM on 09/19/2010

Attempting a "preppy" look is going to be a massive failure. There are far too many well-established brands with quality, conservative clothes that have been in business for a long time. The hipster flame has blown out and the passing of American Apparel will be the first major indicator. Some day, we will all look back on the era and think "Wow, people used to wear turquoise v-neck t-shirts and hot pink shorts? Ridiculous!"

[Krishna Darlene]

01:29 AM on 09/14/2010

I certainly cannot throw stones. We are all human and are apt to make wrong choices, frequently. But one cannot build a hundred-million dollar company by being an idiot. Despite the direction of AA's new campaigns Dov is quite the marketing and PR "G" (again, whether you like the direction or not). He saved AA once before in the midnight hour. . . The movie "ain't o-vah"! What is at stake is more job loss the world over so Dov. . . Work.

CreativityAintaSideHustle.org

[sweatfreeshop]

11:02 PM on 08/22/2010

Most people miss the point of American Apparel being a sweatshop-free USA manufacturer and become distracted by the sexy marketing and shenanigans of the CEO. Even more disgusting that some ads or actions of the CEO are the working conditions that most other companies support with using low-wage sweatshop labor in overseas factories. Why don't the news agencies report about this instead? http://sweatfreeshop.com

[jonathonz]

10:17 PM on 08/19/2010

I have to disagree with most of the posters here about the ads. Their ads were just about the coolest thing about this company.

[jonathonz]

10:16 PM on 08/19/2010

Could see that coming a mile away. Their design aesthetic and quality never supported their ambitions of global takeover. Most of their stuff looks like it was put together by a junior high Home-Ec class.

[radioindiana]

01:58 PM on 08/19/2010

American Apparel tri-blend t-shirts are the best, most comfortable t-shirts one can buy. I own four. Slim Slacks are pretty righteous too, but the fit is inconsistent. I do think (especially) Urban Outfitters and (partially) Alternative Apparel are beating American Apparel in overall quality, style and design choice.

The fact that everything is made in America is reason enough to lament this situation. The last three pieces Ive bought from Urban have all been made in India or China.

[JJovana]

11:52 AM on 08/18/2010

Here is the deal, AA has a shot if they go back to the roots and basics. Affordable good quality American sportswear, ads that dont look like soft core porn ( i feel like taking a shower immediately after seeing one), decent helpful staff, and no, nobody wants assless leggings and lace body suits with matching scrunchies. period.

its a shame since its all usa made.

[bkitty1]

09:45 AM on 08/18/2010

In my opinion, the best thing about American Apparel (aside from everything being made in the USA) is their unique items; dresses that can be worn different ways, bodysuits, funky leggings, and of course their very comfy t-shirts. there are sooo many great things at AA that you just can't find anywhere else, and they don't necessarily look like "hipster" or "preppy" items because you can dress them up however you want. I really like AA and would be sad to see it go. they need to have more sales, though (maybe asking too much considering they're going bankrupt). I love their stuff but can never afford to shop there!

[Scobes]

12:17 AM on 08/18/2010

I feel for those who might lose jobs, and I do appreciate their stance on sweatshops. That being said, I've stayed away from the store ever since I learned of their hiring practices and "chique" dress code. And those skeevy, anorexic-porn ads don't help either.

[Culturegeek]

06:37 PM on 08/18/2010

Look, I agree that the ads are obnoxious, and I am not a huge fan of the clothes either, but do you also stay away from Wal-Mart? If it's their ads, Ralph Lauren?

[Scobes]

07:31 PM on 08/18/2010

I do stay away from Wal-Mart. It's a personal choice, and I have the financial ability to choose where I want to spend my money. AA's hiring practices and emphasis on black girls with "good hair", "chique" (??) presentation, and no fatties or uglies was enough to deter me from spending my money there.

http://gawker.com/5560215/american-apparels-new-standard-no-uglies-allowed

[yellowdoggie]

12:06 AM on 08/18/2010

I feel bad for anyone who is having trouble keeping their business going -- especially feel sad for the employees who might get laid off. But I have to say that I won't miss their obnoxious ads on this site and others.

[deweydecimal]

10:27 PM on 08/17/2010

Their clothes are nasty and ill fitting anyway to anyone who is not an emaciated waif. And even then, fugly.

[patriciacaldwell]

11:23 PM on 08/18/2010

The tee shirts are perfect: high quality fabric, well made, and no ugly icons. My son buys these by the dozens, and he's a healthy athlete. You've spent too much time looking at typical giant-size Americans.

[AmbiguousSage]

09:13 PM on 08/17/2010

That guy is a creep. Their hiring practices are objectionable as well as just wrong (based on photos to tell whether or not you are coke-chic enough). Though they might not use sweatshops, but my neighbor who was a merchandiser for them made $9 an hour in NYC which is NOTHING. Their clothing quality has declined. Good riddance.

[Callyson]

09:06 PM on 08/17/2010

American Apparel *might* have a chance yet...*if* they get rid of this nutcase CEO, whose main accomplishments were trashy ads, ill-advised overexpansion and reduced quality products. For those of us who want to support a company that pays a (relatively) living wage to its employees, we can only hope AA gets itself out of this mess:
http://jezebel.com/5615032/five-things-american-apparel-could-do-to-save-itself?skyline=true&s=i

[thehappymos]

08:31 PM on 08/17/2010

Translation: "Hipster's not selling, Preppy is selling again". Isn't this the definition of sellout? I agree with some of the other comments that maybe he would do better to stop trying to "define" it. American Apparel has some quality clothes, however, their ads have been this side of creepy porn for a long time. How long did he think that Fiona Apple-esque aesthetic was going to work?

[samknox]

08:21 PM on 08/17/2010

Dov Charney hasn't got the brains God gave a sack of potatoes.

American Apparel was fashionable for awhile, now, they're not.

End of story.