Is This The End Of American Apparel?

Maria Ying
24-year-old Rutgers graduate. Born and raised in Disturbia, Surburbia. Writing about anything and everything. Let's get weird.

Just last month, retail giant, American Apparel, laid off many of their workers and closed underperforming stores in order to turn the failing company around, a restructuring plan with cost cutting measures. Within the past five years, American Apparel has totaled a loss of over $300 million. The market value of the company has dropped considerably, from $540 million to $90 million. American Apparel shares are down 87 percent this year and is being traded for as little as 14 cents.

The company discloses its struggle to survive in the retail industry in a statement:

“We believe that we may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.”

In an attempt to save the failing company, American Apparel fired CEO and founder Dov Charney in 2014 and replaced him with Paula Schneider, former president of sales for BCBG and Laundry.

Charney had a reputation as “The Hugh Hefner of retailing,” because he was notoriously known for hiring female employees on the spot during telephone calls and parties and personally taking photographs of the semi-naked women modeling for American Apparel. In the early 2000s, Charney has a slew of lawsuits for quid pro quo sexual harassment, demanding sex from female potential hires in exchange for employment.

As a result of these lawsuits, American Apparel employees must now sign an agreement document that details, “American Apparel is in the business of designing and manufacturing sexually charged T-shirts and intimate apparel, and uses sexually charged visual and oral communications in its marketing and sales activity.”

American Apparel faces a grim future with bankruptcy looming overhead, decreasing brand loyalty, and a tarnished image. Will Paula Schneider be able to save the reputation and company of American Apparel, or is this the end of a retail giant?

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