By Zandra Baskin
This month, the Los Angeles based fashion company American Apparel filed for bankruptcy for the second time. It has closed 12 of the 13 shops in the United Kingdom, initiating the loss of 200 jobs.
For years, American Apparel had been the epitome of trendy. Their top-selling items were plain shirts, crop tops, skintight spandex pants, and running shorts. The problem seems to be that unlike other brands, American Apparel has not evolved with the trends of today. In today’s fashion world, people shop at Zara and H&M, which offers a higher quality at a lower price. American Apparel, on the other hand, has a smaller selection that comes with a bigger price tag.
American Apparel has also been known for racy advertising, displacing young, fresh-faced models wearing nothing but tube socks, sheer bodysuits, or underwear. These suggestive advertising images have been banned in the United Kingdom. Also, in the year 2014, the founder of American Apparel, Dov Charney, was fired over alleged sexual misconduct. People witnessed Charney engaging in inappropriate behavior with younger employees and misusing companies funds. Charney was in charge of advertising and taking pictures of the young models who were posing nearly naked.
The American Apparel net loss was about $384 million over the last five years. This year, their sales have dropped 17% from the previous year. American Apparel is $235 million in long-term debt.
In the beginning of last year, the company came out with a letter stating that employees would receive salary bonuses during the holidays. Since then, four workers have filed lawsuits accusing the company of not following through on promised bonuses and promotions. Additionally, the company no longer allow employees in a group of five or more hang out in the company’s cafeteria during lunch time. Employees take part in a protest every Wednesday outside the parking lot of the American Apparel headquarters located in downtown LA.
American Apparel has taken a plunge out of their once cool fashion trends and has found itself deep in debt. Although the store was once considered fashion-forward and trendy, the company’s terrible actions and business methods create little sympathy for its downfall.